India is currently said to be working out a trade mechanism that will facilitate trade with Russia using local currencies, decision for which is said to be in the process and to be announced by next week.
As Russia’s brutal assault on the country of Ukraine continues, the entire world is imposing severe sanctions on Russia as its economy is down on its knees. The value of rouble is in freefall, people are facing crushing inflation on a daily basis. People are escaping out of the country to avoid the economic collapse which seems imminent.
Among these sanctions, the only ally to Russia seems to be China as it openly supports it. India is taking a neutral stance against the entire issue as it refuses to side with either party. The government is discussing how trade can be settled in roubles and rupees as Indian exporters are awaiting payments of about $500 million that have been stuck after the sanctions on Russian banks.
India is dependent on Russia for several items, mainly defence equipment. India has used this system and it worked successfully with both Russia and Iran in the past. This system is extremely important if India wishes o continue its trade with Russia since the country has been excluded from SWIFT banking system. However, political analysts say that this move could upset India’s relations with all the Western nations. Only time will tell how things play out.
Highlight by Aman Agarwal.