Indian exporters have urged that the government allows trade with Russia using both the national currencies instead of Dollar, as a result of the situation between Russia and Ukraine. The exporters are also examining alternative routes for exports to other countries in the region, as most of these countries’ exports now pass through Russia. Since the beginning of Russia’s invasion of Ukraine, the rouble has plummeted against the dollar.
“Indian Industry has advocated rupee-rouble trading as a way to keep trade going, but the government may find it tough to make that decision,” a source said, adding that the Federation of Indian Export Organizations (FIEO) had made such a request to the government. The mechanism will most likely allow payments to be made in rupees rather than dollars, as is customary. If such a mechanism is implemented, inflows and outflows will most likely be facilitated through accounts at state-owned banks. Multiple ministries are monitoring the situation to analyse the impact of any policy changes, according to an official, who also added that the situation is quite fluid and that no decision has been made on the idea so far.
According to the official, ministries are looking into ways to replace fertiliser imports from Russia and Ukraine. The two countries are also major importers of edible oils, accounting for 16.8% of total imports.
India’s pharmaceutical items are imported by Russia in fourth place. Exporters are also concerned about the impact of Russian restrictions on exports to other Commonwealth of Independent States (CIS) nations.
Exporters are examining alternative routes for exports to other CIS nations, according to Ajai Sahai, Director General of FIEO, because most exports to these countries have hitherto been routed through Russia. “We don’t want trade with the Commonwealth of Independent States to halt.” Using Russian ports appears to be an issue, according to Sahai. According to a government official, the administration is exploring a plan to make it easier to reroute tea exports to the region. According to insiders, Indian exporters are considering routing exports to such countries through China or Georgia.
