After facing secondary sanctions over a weapons pact with Russia, India and Russia decided to arrange payments through the rupee-ruble exchange in 2014. Faced with a similar situation in the present, it is going to be interesting to see how India and Russia plan to bypass the dollar.
According to media sources, India is looking for effective means to get over the recent sanctions placed on Russia over the Ukraine crisis in order to preserve commerce with Moscow.
Trying to make settlements through foreign financial organizations that do not conduct business in nations that have backed the retaliatory sanctions against Russia, reconfiguring payments through minor Russian lending institutions undamaged by the SWIFT restriction, and bolstering its rupee-ruble agreement in place were amongst the alternatives reportedly being deemed.
Owing to their critical role in processing payments for the EU’s gas and oil imports from Russia, Russian banking giants Sberbank and Gazprombank were spared from the current sanctions thus far.
“We are looking into this. Even if these banks face sanctions from the US, payments can be made in euros as these transactions are still being carried out until further sanctions,” according to The Economic Times, a government official claimed.
The whole effects of the fresh sanctions against Russia, according to the official, has yet to be realized.
Another alternative being considered is repaying Russian debts through a rupee auction hosted by the Bank of Russia. Exports of specific commodities and services are used to repay the loan.
After facing secondary sanctions over a weapons pact with Russia, India and Russia decided to arrange payments through the rupee-ruble exchange in 2014. This week, the United States threatened New Delhi with sanctions over the weapons purchase.
In the fiscal year that concluded in March 2021, bilateral commerce among India and Russia was $8.1 billion, with exports to Russia being $2.6 billion and imports totaling $5.5 billion.