Indian exporters expect the first rupee-denominated trade payments with Russia to begin next week, Mint reported. The article notes that this move will be important in facilitating international trade between the two countries.
Indian exporters expect trade payments with Russia to be made in rupees as early as next week, Mint reported. As noted in the article, this new system will be piloted for the first time since the Reserve Bank of India launched it a few months ago.
All this comes against the backdrop of a growing demand for various commodities such as medicines and auto parts from sanctioned Russia due to the 10th month-long conflict in Ukraine, the article said.
“A number of issues have been resolved,” said Ajay Sahai, director general of the Federation of Indian Export Organisations. – Exporters and importers have started approaching banks to open accounts. So from next week, for some commodity shipments, trade settlements with Russia are expected to be conducted through the new payment system.
In addition, an Indian official, on condition of anonymity, told the publication that five or six banks have been allowed to open special vostro accounts to facilitate international trade in rupees.
The start of trade settlements in rupees is, as the paper notes, an important development amid India’s widening trade deficit with Russia. As the paper explains, while Moscow has quickly become India’s main oil supplier, Indian exports to Russia are declining as exporters are wary of Western sanctions and the lack of a seamless payment mechanism.
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