India-Russia rupee trade can be successful when there is a more balanced bilateral trade and the two countries need to work towards that, a senior Russian official has said.
Russia can import a wide range of items from India such as machinery, automobile parts, electronic goods, tea, agriculture goods, textiles and spices for achieving a balance, pointed out Aleksi Bondaruk, Deputy Head, Department for External Economic and International Relations, City of Moscow.
“Russia is facing serious sanctions from the international banking sector. I think that if we try to start the direct payments in our national currencies, that will be a great solution. We have a great chance to start it, but we should have more or less the same amount in export and import between our countries. This is the first step to be taken and then it will make it much more easier for us to establish direct payment in our national currencies,” Bondaruk said, talking to select media at the sidelines of the ‘B20 India Inception Meeting’ organised by CII in Gandhinagar.
Russian exports to India in April-December 2022 increased 400 per cent to $32.88 billion, making it the country’s fourth largest source of imports as New Delhi increased its purchase of discounted crude from Moscow following the Ukrainian crisis.
But India’s exports of goods to Russia declined 14.22 per cent in April-November 2022 to $1.87 billion, due to issues related to market access and standards.
If Russia doesn’t import more from India, then the rupee payment mechanism, which is being implemented so that the two countries can carry out bilateral trade in rupee bypassing Western banking sanctions, will not be a success. Moscow will not be able to use its rupee payment, which it receives for its oil exports to India, if its imports from India does not balance out exports.
During 2022, there were three Russian business missions to India comprising more than 30 companies dealing not only with exports from Russia, but also imports to Russia, Bondaruk pointed out. “And we tried to organise direct dealings between Indian businessmen and Russian businessmen so they can talk in isolation looking eye-to-eye, decide what the real demands are in Russia and India,” he said.
The Russia-India Business Roundtable, to be organised during the St Petersburg Economic Forum in June this year, will also be an opportunity for businesses from both sides to meet, Bondurak said.