New Delhi: According to a top Russian banker, the country has constructed a robust payment system in which most business transactions between the two nations can be made in the Indian currency, the rupee, and the Russian currency, the rouble. The two national currencies dominate bilateral trade payments with around 96% of payments.
The chief of Sberbank in India, Ivan Nosov, stated that, at present, there are not many issues related to payment between Russia and India. He called the arrangement one of the most reliable payment systems in Russia with the other countries.
The development is significant in the context of the sharp growth of trade between the two countries in recent years. In 2024, Russia-India trade will be amounted to a new record of $70 billion, nearly threefold the size of 2022. One of the key contributors to this growth was India’s expanded oil imports from Russia, where oil was supplied at ‘low’ prices due to Western sanctions against Russia.
But the payment system had previously been facing issues. Russian firms had been worried about holding high volumes of Indian rupees which are not readily convertible into other currencies. Another problem was the trade deficit as India was importing far more from Russia, particularly oil, than it was exporting to Russia.
Russia and India have now extended their banking network to enable trade activities. Currently, 22 Russian banks and 17 Indian banks are participating in the payment processing between the two countries.
The payment system also has got a speedy turn. More than half of the transactions occur in less than a minute, and around 90% of them are completed in less than 10 minutes, Nosov said.
The upgrade could ease the path for India and Russia to boost trade without relying too much on western financial mechanisms. It also improves ties between the two countries on the economic front as both are seeking to facilitate cross-border payment.
Despite the alterations in the global trade and sanctions, India and Russia have been moving ahead in enhancing economic relations.Despite all these global trade and sanctions changes Russia and India have continued enhancing their economic relations. During his recent meeting with Russian President Vladimir Putin, Prime Minister Narendra Modi also pointed out the increasing economic cooperation.
