NEW DELHI: Bilateral payments with Russia may not be affected even though the United States and other Western countries have imposed economic sanctions on Moscow following the attack on Ukraine.
Bilateral payments between India and Russia are made in Indian Rupee. For both imports and exports, payments are made or received in rupees for shipments. Thus, Western sanctions may not impact payments barring exchange rate fluctuations, sources said on Friday.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government-to-government contracts.
Bilateral trade between India and Russia stands at $9.4 billion so far this financial year, compared to $8.1 billion in 2020-21.
India’s major imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment, and fertilizers.
India’s major export products to Russia include pharmaceuticals, electrical machinery and equipment, organic chemicals, and vehicles.
Also in the past, India had devised a mechanism to pay for imports from Iran when sanctions were imposed on the Persian Gulf nation.
India had entered into an agreement with Iran to carry out trade-related transactions through a rupee account held with a state-owned lender.
In accordance with the mechanism, Indian importers deposited the rupee payments into the Iranian banks’ “vostro” account, maintained with India’s state-owned lender UCO Bank for imports, including crude oil.
The account was also used to make payments to Indian exporters for sending goods to Iran and payments were settled daily.
On Thursday, Russia launched military operations against Ukraine, the biggest attack on a European state since World War II.
Meanwhile, European Union leaders are standing together and have agreed on a second package of economic and financial sanctions against Russia.
At the United Nations, officials have set aside $20 million to bolster UN humanitarian operations in Ukraine. In addition, the UN Security Council is expected to vote on Friday on a resolution condemning Russia and demanding the immediate withdrawal of all its forces. Moscow, however, is certain to veto it.
Meanwhile, Finance Minister Nirmala Sitharaman said Friday that restoring peace is essential for a sustainable recovery of the pandemic-hit global economy as well as India.
India’s development, she said, is challenged by these global disruptions which threaten global peace and the global value chain.
“No country today can plan for its recovery, especially at a time when global value chains have already brought us closer together…while value chains face challenges and threats in Due to this type of disruption, recovery not only for India but for countries across the world will be severely hampered,” she said.
Bilateral payments between India and Russia are made in Indian Rupee. For both imports and exports, payments are made or received in rupees for shipments. Thus, Western sanctions may not impact payments barring exchange rate fluctuations, sources said on Friday.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government-to-government contracts.
Bilateral trade between India and Russia stands at $9.4 billion so far this financial year, compared to $8.1 billion in 2020-21.
India’s major imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical appliances, electrical machinery and equipment, and fertilizers.
India’s major export products to Russia include pharmaceuticals, electrical machinery and equipment, organic chemicals, and vehicles.
Also in the past, India had devised a mechanism to pay for imports from Iran when sanctions were imposed on the Persian Gulf nation.
India had entered into an agreement with Iran to carry out trade-related transactions through a rupee account held with a state-owned lender.
In accordance with the mechanism, Indian importers deposited the rupee payments into the Iranian banks’ “vostro” account, maintained with India’s state-owned lender UCO Bank for imports, including crude oil.
The account was also used to make payments to Indian exporters for sending goods to Iran and payments were settled daily.
On Thursday, Russia launched military operations against Ukraine, the biggest attack on a European state since World War II.
Meanwhile, European Union leaders are standing together and have agreed on a second package of economic and financial sanctions against Russia.
At the United Nations, officials have set aside $20 million to bolster UN humanitarian operations in Ukraine. In addition, the UN Security Council is expected to vote on Friday on a resolution condemning Russia and demanding the immediate withdrawal of all its forces. Moscow, however, is certain to veto it.
Meanwhile, Finance Minister Nirmala Sitharaman said Friday that restoring peace is essential for a sustainable recovery of the pandemic-hit global economy as well as India.
India’s development, she said, is challenged by these global disruptions which threaten global peace and the global value chain.
“No country today can plan for its recovery, especially at a time when global value chains have already brought us closer together…while value chains face challenges and threats in Due to this type of disruption, recovery not only for India but for countries across the world will be severely hampered,” she said.
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