In the wake of the sanctions imposed on Russian oil, the volume of Russian oil imports into India has increased dramatically. New Delhi imports cheap Russian oil for domestic consumption and everything for processing (and then sales). However, Lavrov’s words indicate that the state does not adequately compensate Moscow for cheap oil.
In response to the journalist’s question, the Russian Foreign Minister indicated that Russia has accumulated billions of rupees in Indian banks that it cannot use, so it is only “sitting” on money.
it’s a problem. We need to use this money. However, this would require converting the rupee into another currency, which is currently being negotiated
Lavrov said.
India and Russia have been exploring the possibility of settling trade in rupees or rubles since the beginning of the invasion of Ukraine, but little progress has been made on this matter more than a year later.
The main problem is that India’s imports from Russia far exceed its exports, and thus, payments in Indian rupees continue to accumulate in Indian bank accounts.
The simplest solution is that India increases its exports to Russiabut this is not possible due to the low quality of Indian goods and Russia’s wealth of raw materials. Another solution is for India to convert its rupees into another currencywhich Russia can also use (for example, the Chinese yuan), but the Indian government is not willing to do this because of the obvious additional costs associated with the conversion.
However, Moscow seems to have satisfied India’s delay, and a few days earlier Efforts to settle bilateral trade in rupees have been suspended Reuters reported last Thursday.
Cover image is illustrative. Cover image source: Getty Images
