India wants to bypass dollar to keep trading with Russia

India wants to bypass the dollar to keep trading with Russia

According to Indian media sources, India is looking for an effective means to get over the recent sanctions imposed on Russia over the Ukraine crisis in order to keep trade with Moscow flowing.

Making settlements through foreign financial institutions that do not operate in countries that have supported the punitive measures against Russia, routing payments through minor Russian lenders unaffected by the SWIFT ban, and boosting its rupee-ruble arrangement are among the options reportedly being considered.

Due to their critical role in processing payments for the EU's gas and oil imports from Russia, Russian banking giants Sberbank and Gazprombank have been exempted from the current sanctions so far.

"This is something we're looking into." Payments can be made in euros even if these banks face US sanctions because these transactions are still being carried out until further restrictions are imposed, according to a government official quoted by The Economic Times.

According to the official, the full impact of the fresh sanctions against Russia has yet to be felt.

Another alternative being considered is repaying Russian debt through a rupee auction hosted by the Bank of Russia.

Exports of specific commodities and services are used to repay the loan.

After facing secondary sanctions over a weapons pact with Russia, India and Russia decided to make payments through the rupee-ruble exchange in 2014.

This week, the United States threatened New Delhi with sanctions over the arms purchase.

In the fiscal year that ended in March 2021, bilateral trade between India and Russia was $8.1 billion, with exports to Russia being $2.6 billion and imports totaling $5.5 billion.

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