Indian banks are showing caution in their dealings with Russian clients due to concerns about possible US sanctions. Denis Alipov, Russia’s ambassador to India, recently explained that Indian banks, particularly those connected to the US, are worried about facing penalties if they continue trading with Russian businesses.
Washington has increased its watch over trade between India and Russia, especially after expanding its list of sanctioned Russian entities. Back in June, the US added major Russian banks to this list, making it clear that foreign banks working with these Russian entities could lose access to the US financial system entirely. For Indian banks that rely on the US market, this is a serious risk.
In response, Russia and India have been working on a plan to bypass the US dollar in their trades, shifting instead to a ruble-rupee system for direct transactions. Alipov mentioned that top officials from both nations are set to meet in November to discuss ways to strengthen this alternative trade network and improve the flow of goods and services between the two countries.
Alipov added that BRICS (Brazil, Russia, India, China, and South Africa) and other developing nations are looking for ways to create a fairer global financial system. He emphasized the importance of developing nations having “an equal say” in financial matters, not dominated by Western powers. BRICS has become a vital platform for promoting the interests of the Global South, offering an alternative to traditional Western control over global finance.
India’s trade with Russia has grown significantly in the past two years, as Russia turned to Asian markets after the West imposed strict sanctions due to the Ukraine conflict. India, while under pressure to support Western sanctions, has stayed neutral and even expanded its imports of Russian oil. This year, India surpassed China to become Russia’s largest oil buyer.
In fact, trade between Russia and India has surged to over $65 billion in 2023—six times higher than before 2022. Leaders of both countries have set an ambitious goal to reach $100 billion in mutual trade by 2030.
The US is watching these developments closely. With both nations seeking ways to bypass the dollar and build alternative trade routes, the stakes are high. It raises big questions: Can the US maintain its grip on global finance, or will countries like India and Russia lead a shift towards a new, multipolar financial world?
