Russia Seeks to Strengthen Trade with India Amid Sanctions
NEW DELHI, Dec 4 – Gazprombank and Alfa Bank, both significant Russian financial institutions, are applying for approval to operate in India as part of an effort by Russia to expand trade with India, its largest offshore oil customer, according to four sources familiar with the situation.
There’s this growing tension, too, especially with the U.S. putting pressure on India regarding its ties with Russia. Interestingly, both nations aim to ramp up their trade from $69 billion to an ambitious $100 billion by 2030.
Alfa Bank, which is Russia’s largest private lender, has been under Western sanctions since the beginning of the full-scale invasion of Ukraine in 2022. Gazprombank, on the other hand, has mainly handled payments for energy exports before facing sanctions last year.
Banks like these have reached out to India’s central bank seeking to open branches, and there are expectations of announcements aligning with the upcoming two-day visit of Russian President Vladimir Putin to India this Thursday, as noted by four sources who preferred anonymity due to the sensitive nature of the discussions.
Recently, Russian officials and bank representatives met with officials from the Indian finance ministry to discuss these plans.
Plans for Expansion
Alfa Bank is particularly eyeing operations in Mumbai and New Delhi. Gazprombank, which already has a liaison office in Mumbai, is also searching for potential locations for a broader presence.
Meanwhile, the Central Bank of Russia just announced its new office opening in Mumbai to promote Russian financial interests. It’s worth noting that India is already home to Russian institutions like Sberbank and VTB Bank, which recently expanded their operations.
The Russian government is seriously considering how to address its trade deficit with India by increasing imports, even as Indian refiners look to reduce oil purchases from Russia, possibly hitting a three-year low in response to increasing Western sanctions.
Sberbank shared that it has begun issuing rupee-denominated letters of credit in India, aimed at helping Russian companies facilitate imports from India.
