According to the president of an Indian exporters’ organisation, India is poised to announce a payment agreement that will allow trade with Russia to continue. The so-called rupee-ruble trade system may be implemented as soon as next week.
The Indian finance ministry and the Reserve Bank of India are yet to comment on the system, which would allow Indian exporters to continue doing business with Russia even if international payment mechanisms were prohibited due to Western sanctions. India will also be able to purchase Russian energy exports and other items under the terms of the agreement. Sakthivel stated that the Indian government is working on a proposal to enable four to five nationalised Indian banks to participate in the trade, and that the central bank governor, the finance minister, and banks have met to discuss the proposal.
Sakthivel added that the international sanctions on Russia provide Indian exporters with an opportunity to expand in the Russian market. “Export to Russia is not much, only in agriculture and pharmacy products. Now that the whole of the West is banning Russia, there will be lot of opportunities for Indian firms to enter Russia,” he said. However, continuing trade with Russia risks angering Western nations, including the United States, which have imposed sanctions on Moscow for its invasion of Ukraine. The U.S. is India’s biggest export market. According to India’s official data, India-U.S. trade in calendar year 2021 was $112.6 billion, consisting of $71 billion in exports and $41 billion in imports.
