New Delhi: India will study the impact of Western sanctions against Russia while formulating a payment mechanism to settle its trade with Moscow, the Finance Ministry said on Thursday.
Russia invaded Ukraine on February 24 in the biggest attack on a European state since World War II, triggering a flurry of sanctions that limited Russia’s ability to trade in major currencies and many of its banks. and affected state-owned enterprises.
“We will await the details of any unilateral sanctions. Exact details to examine their impact on our economic exchanges with Russia,” ministry spokesman Arindam Bagchi said at a news conference.
Russia exported goods worth $6.9 billion to India in 2021, mainly mineral oil, fertilizers and rough diamonds, while India’s exports totaled $3.33 billion, mainly pharmaceutical products, tea and coffee.
Bagchi said many countries, mainly in Europe, are buyers of Russian oil and India, the world’s third largest oil importer and consumer, is always exploring all possibilities in global energy markets to meet its oil demand.
India covers only a fraction of its oil needs with imports from Russia and is exploring trade settlement mechanisms including using the Indian currency or rupee-ruble system as Moscow offers crude and other commodities at a discounted rate. . read more
Bagchi said that while India had a one-rupee exchange mechanism, he was not sure whether it would be used or be viable in light of sanctions.
India has called for an end to the violence in Ukraine but has avoided outright condemnation of Russia, with which it has longstanding political and security ties.
Under pressure from sanctions, many importers have decided to stop trade with Moscow, reducing crude to record discount levels, prompting Indian companies to step in.
The country’s top refiner Indian Oil Corp recently ordered 3 million barrels of Russian oil through a tender, while Hindustan Petroleum Corp had booked 2 million barrels for May loading.