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India's Proposal: Using Rupees from Russian Suppliers for Export to Third Countries

© AP Photo / Channi AnandFILE- In this Nov. 13, 2016 file photo, an Indian holds 2000 rupee currency notes in Jammu, India
FILE- In this Nov. 13, 2016 file photo, an Indian holds 2000 rupee currency notes in Jammu, India - Sputnik India, 1920, 24.04.2024
Dr Ajay Sahai emphasised that the concept offers benefits to Indian exports while allowing Russia to utilise the accumulated rupees, making it a win-win solution for both parties.
India has proposed using rupees held by Russian suppliers in Indian bank accounts to export goods to third countries, according to Dr Ajay Sahai, CEO and Managing Director of the Federation of Indian Export Organisations (FIEO).

"We are discussing with the government whether this money can be used for exports to third countries. For example, a Russian company might place an order, say from Argentina, for rice supply in India, and the money can be transferred [to Indian suppliers] from these accounts," he added.

The third country would then pay Russia for the goods in another currency.

"The idea is that such a scheme helps Indian exports and also helps Russia use the accumulated rupees. It's a win-win option for both sides," Sahai mentioned.

While the exact amount wasn't disclosed, Sahai acknowledged the presence of billions of rupees from Russian exporters in Indian banks, highlighting that trade in Indian rupees with Russia continues, albeit in modest volumes.
This initiative stems from Russian Foreign Minister Sergey Lavrov's announcement last May, citing the accumulation of rupees in Indian banks a challenge under discussion.
In 2023, bilateral trade between Russia and India increased to $65 billion, making Russia India's fourth largest trading partner.
However, this growth has exacerbated trade imbalances, particularly with Russia exporting significantly more than it imports, mainly in energy products.
Apart from Indian rupees, trade settlements between Moscow and New Delhi involve US dollars, UAE dirhams, and Chinese yuan.
An illustration picture taken in London on May 8, 2022, shows a gold plated souvenir cryptocurrency Tether (USDT) coin arranged beside a screen displaying US dollar notes. - Tether (USDT) is an Ethereum token known as a stablecoin that is pegged to the value of the US dollar, and is currently the largest stablecoin with a market value of USD 83 billion dollars.  - Sputnik India, 1920, 21.03.2024
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