India and Russia would find a way to bypass the ‘artificial impediments’ created by the West in the payment system, the Russian Foreign Minister Sergey Lavrov said here on Friday after meeting his Indian counterpart S Jaishankar in New Delhi. The Indian Foreign Minister, however, maintained a more discreet stance on the issue, only venturing to say that “contemporary issues and concerns” were to be discussed.
During a visit keenly watched by the West from where pressure has been borne on several fronts to keep India from sealing trade deals, especially on oil with Russia, Lavrov also met with the Prime Minister Narendra Modi following his discussions with Jaishankar. He said that he had to convey a “message personally” from the President Vladimir Putin to the Prime Minister Narendra Modi. He said that Russia was open to India mediating in the Ukraine crisis. “
Russia, according to some reports, is offering oil to India at a deep discount of up to $35 per barrel. Source said that Russia is rumoured to have offered rupee-rouble-denominated payments to India using Russia’s messaging system, SPFS (an alternative to SWIFT).
Following Russia’s invasion of Ukraine on February 24, seven Russian banks were banned from using the SWIFT messaging system that effectively stopped them from participating in international trade.
Alternative payment mechanism
While the Indian side was reticent, the Russians were more than forthcoming in talking about the future trading arrangement. Addressing a press conference after meeting Jaishankar, the Russian Foreign Minister said the use of national currencies in trade is being facilitated and the dollar will be bypassed.
“As regards use of rupee and rouble in our trade deals, I would recall that many years ago we started moving in our relationship with countries such as India and China, from using the US dollar to the more and more use of national currencies. This trend will be intensified which is natural and obvious. We will be ready to supply to India any goods which India wants to buy,” Lavrov said.
Lavrov pointed out that that very good relations existed between trade ministries and finance ministries of both countries. “I have no doubt that a way will be out to bypass the artificial impediments which the West created. We have no doubt a solution would be found and the respective ministries are working on it,” he said answering a question on an alternative payment mechanism.
Justifying the proposal to move to using national currencies, Lavorov said that it was necessary because of the “absolutely unreliable nature’’ of our Western counterparts. “We don’t want to depend on a system which could be closed anytime. We don’t want to depend on system whose masters can steal our money overnight,” he said.
Jaishankar, however, was more reserved in airing his views and steered clear from commenting on critical issues, including evolving an alternative payment mechanism for defence and oil purchases by India. In his opening remarks, he said that the two would be discussing ”contemporary issues and concerns’’. “Our meeting today takes place in a difficult international environment quite apart from the pandemic. India, as you are aware, has always been in favour of resolving differences and disputes through dialogue and diplomacy,” the Minister said.
US Deputy National Security Adviser Daleep Singh, who met Foreign Secretary Harsh Vardhan Shringla on Thursday, had said that there could be consequences if some country tried to circumvent Western sanctions against Russia.
US, allies step up pressure prior to Jaishankar-Lavrov meetNew Delhi asked to reduce strategic dependency on Russia; not to support undermining of sanctions
While India has not declared its intent on whether it is interested in buying Russian oil, the top officials have been arguing that since India was a major importer of oil and gas, it had the right to go for the best global offers in the international market. Since European countries themselves had not stopped sourcing oil and gas from Russia, the Western nations could not insist India not to take a decision based on its economic interests.
Lavrov praised India’s stand on the ongoing Russia-Ukraine war and said Russia “appreciated” that New Delhi was taking the situation in the entirety of facts and not just one-sided way. While India has condemned the use of violence in Ukraine, it abstained from voting at the UN Security Council and UN Human Rights Commission on motions against Russia.