At a summit meeting in September, the government accepted the call to double Russian trade

Despite the United States-led sanctions against Russia after its invasion of Ukraine, India has decided not only to continue, but also to double its trade with Moscow in the “near future”.

The increase in trade volumes between the two countries is mainly due to sharply higher imports of competitively priced Russian crude oil by India.

India, which imported less than 1 percent of its total crude from Russia before the war between Russia and Ukraine, now imports about 22 percent of its total needs from Russia.

Crude oil imports from Iraq and Saudi Arabia, the two largest suppliers of crude oil to India, account for approximately 21 and 16 percent of India’s total imports respectively.

“The Ministry of Commerce said it was ready to support the initiative, and based on feedback from various exporters and business entities, DoC was confident of doubling trade between India and Russia in the foreseeable future, and this would be further incentivized by the use of INR for trade settlement,” said the minutes of a September high-level meeting on Indian rupee trade – the details of the meeting were obtained by The Indian Express under the Right to Information Act.

Sanjay Malhotra, then secretary of the Ministry of Financial Services, and T Rabi Sankar, Deputy Governor of the RBI, chaired the meeting attended by representatives of ministries including Commerce, Finance and Foreign Affairs, in addition to those from the RBI, the Indian Banks Association, and private and government banks. The Ministry of Commerce was represented by Manish Chadha, Co-Secretary at the Ministry.

The meeting of the Department of Financial Services was convened to discuss the issue of Indian rupee overseas trade announced by the RBI in July.

Although the first beneficiary of this trade deal was Russia, countries such as the Maldives, Sri Lanka and other countries in Southeast Asia, Africa and Latin America have also expressed interest.

On November 9, Foreign Minister S. Jaishankar and Russian Foreign Minister Sergey Lavrov met in Moscow and India made it clear that it will continue its purchases in Moscow.

“…as the world’s third largest consumer of oil and gas, as a consumer with not very high income levels, it is our fundamental obligation to ensure that the Indian consumer has the best possible access to international markets. And in that respect, frankly, we’ve seen the India-Russia relationship work to our advantage. So if it works in my favor, I’d like to keep it up,” Jaishankar said in Moscow.

Since Russia’s invasion of Ukraine, countries in the West led by the US have imposed sanctions on Moscow and the country has been disconnected from the SWIFT messaging system (used by banks for foreign currency payments for international transactions).

The sanctions against Russia and India’s increased dependence on Russian imports were the main reasons behind the provision for Indian rupee overseas trade.

The value of trade between India and Russia has already surpassed the level reached during the last fiscal year, when the value of trade between the two countries reached $13.12 billion.

During the first five months of the current fiscal year, the value of trade between the two nations was pegged at $18.23 billion — with India’s imports from Russia accounting for $17.23 billion, while exports to Russia amounted to $992.73. million dollars, resulting in a significant shortfall.

On his way to the G20 summit in Bali, US Treasury Secretary Janet Yellen reached India on Friday with a high-level delegation for the India-US Economic Financial Partnership meeting. The visit came as a US-led coalition was pushing for a price cap on Russian crude oil. India’s position was tentative to remain noncommittal on such a price cap arrangement.

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