Alternative payment system with Russia in works
New Delhi, April 16
The government is considering an alternative payment mechanism with Russia instead of instituting a separate architecture for rupee-rouble trade, say sources.
Rouble currency volatile
- Rouble is currently an extremely volatile currency and the weakest in the developed world
- The negotiations to set its value will hence be challenging and time-consuming
- The government is examining the use of Russian banking channels for its import of gas, crude and oil from Russia
Export-import
- India buys defence hardware, petroleum products, diamonds and fertilisers from Russia
- It exports mainly pharmaceutical products, capital goods, organic chemicals and farm products
- There is difficulty in trade because shipping lines reluctant to operate
A rupee-rouble payment mechanism will not only catch the eye of the West but it is also impractical in the long run, they said while pointing to the high-decibel level in its media after India bought a small amount of Russian crude. The main issue in rupee-rouble trade is that India imports more from Russia and therefore squaring the accounts is an issue.
Rouble is currently an extremely volatile currency and the weakest in the developed world. The negotiations to set its value will hence be challenging and time-consuming. Instead, the government is examining the use of Russian banking channels that are being used by the West for its imports of gas, crude and oil from Russia.
Currently, the Commerce Ministry as per its Secretary BVR Subrahmanyam is trying to facilitate the payment for exporters. “The panel of secretaries that is looking into this issue, of which I am a member, isn’t considering any such proposal (rupee-rouble trade),” he had said.
The effort is to get out the pending dues of exporters via European channels and the government is examining if these sanctions-free route could be used to continue trade with Russia, say the sources.
According to reports, 35 of the 56 major exporters to Russia have already received payments from importers in euro through non-sanctioned banks such as Gazprombank.
Currently, the sources say there is difficulty in trade with Russia because shipping lines are reluctant to operate due to the absence of insurance. India buys defence hardware, petroleum products, diamonds and fertilisers from Russia. It exports mainly pharmaceutical products, capital goods, organic chemicals and farm products.
