As the Russian offensive continues against Ukraine, the Indian government is giving serious consideration to setting up a rupee payment mechanism with Russia to bypass the western sanctions imposed on Moscow, Reuters reports.
Russia which is now under a siege of sanctions is one of the major suppliers of fertilisers to India and now it is important that India looks at how it can continue to receive supplies as the ongoing conflict with Ukraine seems to last a little while longer.
India is now working on a plan to ensure that Russian banks and companies open accounts with some state-run Indian banks for a trade settlement and funds in these accounts will be a guarantee of payment for the trade exchanged between India and Russia.
Also, both India and Russia will barter commodities to offset the amount, and “This is a proactive move assuming that the conflict escalates and there could be a slew of sanctions in place,”.
It added, “In this case we would not be able to settle the transaction in dollars and so an arrangement has been proposed to set up a rupee account, which is being considered.”India has in the past used this method of transaction for trades with Iran after the middle-eastern country when it came under Western sanctions for its nuclear weapons program. However, discussions with Russia are still at a preliminary stage.
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