New Delhi: According to a person with knowledge of the matter, India is proposing to settle trade with Russia in rupees, as the South Asian country goes ahead with the purchase of oil and arms from the sanctions-hit country.
New Delhi plans to use the equivalent of about $2 billion deposited in Russia’s state-controlled VTB Bank PJSC and Sberbank of Russia PJSC, said the person, to be identified as deliberations private. Not there.
The source said a plan could be finalized soon as Russian officials are visiting the Indian capital this week.
India has previously used a rupee-ruble mechanism, which this time has fallen out of favor due to extreme volatility in the Russian currency, the person said, adding that deposits in Russian accounts could rise to $5 billion by the end of the year. , considering how India is buying a lot.
Prime Minister Narendra Modi’s administration is keen to finalize a mechanism as India is lifting oil imports to take advantage of the slump in prices after the US, Europe, Australia and Japan imposed economic sanctions on Russia. Cheaper Russian crude could help India, which has seen inflation rise above the central bank’s target as oil rally to around $130 a barrel.
India’s trade deficit with Russia stood at $6.61 billion in the year ended March 2022, with total bilateral trade at $13.1 billion. New Delhi is working on promoting exports of products like pharmaceuticals, plastics and chemicals to balance the books of account.
India, the world’s biggest buyer of Russian arms, has resisted pressure from the US and Australia to ease ties. It has cited threats from Pakistan and China to argue its case for continued supplies, a move that prompted the US to consider expanding foreign military finance to wean India off Russian-made military hardware. inspired to.
India has historically attempted a neutral stance on tensions between major powers, even as it has joined groups such as the Quad security alliance with Australia, Japan and the US.
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