GAO: Russia has amassed billions of rupees in Indian banks which it can’t use, international minister Sergei Lavrov mentioned on Friday, pointing to a ballooning business surplus with the South Asian country.
“This is a problem,” Lavrov instructed journalists in Goa at the sidelines of the Shanghai Cooperation Organization assembly. “We want to use this cash. But for this, those rupees should be transferred in some other forex, and that is being mentioned now.”
India’s total exports to Russia shrunk 11.6% to $2.8 billion in the first 11 months of the 2022-23 financial year, while imports rose nearly fivefold to $41.56 billion, according to data from the ministry of commerce and industry. That surge came as Indian refiners have scooped up discounted Russian oil in the past year that’s been shunned by the West in response to President Vladimir Putin’s invasion of Ukraine.
Imports of Russian crude by India reached a record 1.68 million barrels a day in April, up six-fold on a year earlier, according to Vortexa Ltd, a data intelligence firm.
The Kremlin initially encouraged India to trade in national currencies following sanctions on Russian banks and a ban on transactions using the SWIFT messaging system.
But volatility in the ruble soon after the war began meant plans for a rupee-ruble mechanism for oil imports were abandoned. India has resisted pressure from the US to scale back relations with Moscow since the invasion of Ukraine.
‘Frozen funds’
The imbalance in trade for Russia means “the quantity of ‘frozen budget’ can achieve tens of billions of bucks,” said Alexander Knobel, director of the Institute of International Economics and Finance of the Ministry of Economic Development. “The scenario is annoyed via India’s traditionally top mixture business deficit, which reduces the probabilities of clearing settlements with 3rd nations.”
Russia is India’s biggest provider of guns and army {hardware}, even though protection provides to the South Asian country have stalled for loss of a cost mechanism that does not violate US sanctions.
Indian bills for guns amounting to greater than $2 billion had been caught for roughly a yr as New Delhi has been not able to settle the invoice in bucks as a result of issues about falling foul of secondary sanctions, whilst Russia is reluctant to just accept rupees for purchases.
Indian oilers had been seeking to settle refin bills for discounted crude the usage of United Arab Emirates dirhams, rubles and rupees. Trades may also be exempted from global restrictions if they’re priced under the $60-a-barrel worth cap set via the Group of Seven countries and their European Union companions.
Indian lenders opened particular vostro accounts at Russian banks together with Sberbank PJSC and VTB Bank PJSC to facilitate in a foreign country business in rupees and stay crude flowing.
Currency restrictions imply Russian exporters face issue in repatriating rupees, Bank of Russia Governor Elvira Nabiullina mentioned on April 28.
“This is a problem,” Lavrov instructed journalists in Goa at the sidelines of the Shanghai Cooperation Organization assembly. “We want to use this cash. But for this, those rupees should be transferred in some other forex, and that is being mentioned now.”
India’s total exports to Russia shrunk 11.6% to $2.8 billion in the first 11 months of the 2022-23 financial year, while imports rose nearly fivefold to $41.56 billion, according to data from the ministry of commerce and industry. That surge came as Indian refiners have scooped up discounted Russian oil in the past year that’s been shunned by the West in response to President Vladimir Putin’s invasion of Ukraine.
Imports of Russian crude by India reached a record 1.68 million barrels a day in April, up six-fold on a year earlier, according to Vortexa Ltd, a data intelligence firm.
The Kremlin initially encouraged India to trade in national currencies following sanctions on Russian banks and a ban on transactions using the SWIFT messaging system.
But volatility in the ruble soon after the war began meant plans for a rupee-ruble mechanism for oil imports were abandoned. India has resisted pressure from the US to scale back relations with Moscow since the invasion of Ukraine.
‘Frozen funds’
The imbalance in trade for Russia means “the quantity of ‘frozen budget’ can achieve tens of billions of bucks,” said Alexander Knobel, director of the Institute of International Economics and Finance of the Ministry of Economic Development. “The scenario is annoyed via India’s traditionally top mixture business deficit, which reduces the probabilities of clearing settlements with 3rd nations.”
Russia is India’s biggest provider of guns and army {hardware}, even though protection provides to the South Asian country have stalled for loss of a cost mechanism that does not violate US sanctions.
Indian bills for guns amounting to greater than $2 billion had been caught for roughly a yr as New Delhi has been not able to settle the invoice in bucks as a result of issues about falling foul of secondary sanctions, whilst Russia is reluctant to just accept rupees for purchases.
Indian oilers had been seeking to settle refin bills for discounted crude the usage of United Arab Emirates dirhams, rubles and rupees. Trades may also be exempted from global restrictions if they’re priced under the $60-a-barrel worth cap set via the Group of Seven countries and their European Union companions.
Indian lenders opened particular vostro accounts at Russian banks together with Sberbank PJSC and VTB Bank PJSC to facilitate in a foreign country business in rupees and stay crude flowing.
Currency restrictions imply Russian exporters face issue in repatriating rupees, Bank of Russia Governor Elvira Nabiullina mentioned on April 28.