India is a big beneficiary of cheap Russian oil.
Moscow:
Top Russian lenders Sberbank and VTB said they were increasing their ability to convert rupees into rubles to help exporters raise funds effectively trapped in India due to Western sanctions.
Since Russia sent troops to Ukraine in February 2022, Western countries have imposed sweeping sanctions and aimed to withdraw Russian energy exports.
India is a major beneficiary of Russian crude oil, which it can obtain at cheap prices. However, the rupee is not fully convertible, and Russia seeks to avoid the use of the US dollar and other currencies it calls “unfriendly” Western currencies.
Ivan Nosov, head of Sberbank’s India branch, speaking at the Russia Eastern Economic Forum in Vladivostok on Tuesday, described the branch as a “bridge between countries in the financial field” that handles exchanges from rupees to rubles. said.
VTB CEO Andrei Kostin also said in comments published by RBC Daily on Monday that his bank, Sberbank, and others are currently converting rupees into rubles.
“Trade transactions are done in renminbi, but there is also direct exchange of rupees and rubles, usually through intermediaries in India or the (United Arab Emirates),” Andrei Kostin said. “Many of our customers don’t have Rs.”
trade imbalance
According to customs data, trade volume between Russia and India increased 2.6 times to $35.3 billion in 2022 due to a surge in Russian exports.
“The trade balance that was favorable to Russia has become even more imbalanced,” India’s ambassador to Moscow, Pawan Kapoor, said on Tuesday, pointing to increased supplies of crude oil and fertilizer.
In response, India is trying to stimulate investment in several areas and diversify the goods it supplies to Russia, Kapur said at an economic forum.
Due to a global supply crunch, Russian companies have stopped offering discounted fertilizers such as diammonium phosphate (DAP) to India, three industry sources told Reuters.
On the issue of the transaction, Mr. Kapoor denied reports in Russian media that the rupees stuck in the accounts of Russian exporters in India were linked to payments for oil supplies.
“That’s not true,” he said. “All the oil was purchased with foreign currency.”
However, the Russian government admits that some funds are stuck in India.
Russian Foreign Minister Sergei Lavrov said last week that he discussed the payment issue with External Affairs Minister S. Jaishankar at a summit in Jakarta.
“We have accumulated billions of rupees that have yet to be spent, and our Indian friends have promised to suggest promising areas for investment,” Lavrov said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
