New Delhi: Bilateral payments with Russia may not be affected even though the US and other Western countries have imposed economic sanctions on Moscow in the wake of the attack on Ukraine.
Bilateral payments to India and Russia are made in Indian Rupees. For both import and export, the shipment is paid or received in rupees. Therefore, barring exchange rate fluctuations, sanctions by the West may not have any impact on payments, sources said on Friday.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government-to-government contracts.
Bilateral trade between India and Russia stands at USD 9.4 billion so far this financial year, up from USD 8.1 billion in 2020-21.
India’s main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical equipment, electrical machinery and equipment, and fertilizers.
The major items exported from India to Russia include pharmaceutical products, electrical machinery and equipment, organic chemicals and vehicles.
In the past too, India had devised a mechanism to pay for imports from Iran when sanctions were imposed on the Persian Gulf nation.
India had entered into an agreement with Iran to conduct trade-related transactions through a rupee account maintained with a state-owned lender.
As per the mechanism, Indian importers deposited payments in rupees in the ‘Vostro’ account of Iranian banks maintained with Indian state-owned lender UCO Bank for imports including crude oil.
The account was also used to make payments to Indian exporters to ship goods to Iran and payments were settled on a daily basis.
Russia on Thursday launched a military operation against Ukraine, the biggest attack on a European state since World War II.
Meanwhile, EU leaders are putting up a united front and agreeing on a second package of economic and financial sanctions against Russia.
At the United Nations, officials set aside $20 million to promote UN humanitarian work in Ukraine. separately, united nations security council Voting is expected on Friday on a resolution condemning Russia and calling for the immediate withdrawal of all its forces. However, Moscow is sure to veto it.
Meanwhile, the Finance Minister Nirmala Sitharaman Said on Friday that restoration of peace is necessary for the sustained recovery of the world as well as India’s economy hit by the pandemic.
He said that India’s development is being challenged by these global disturbances, which threaten world peace and global value chain.
“No country can plan for its recovery today, especially in an era when global value chains that have already brought us closer to each other… will be severely disrupted for countries everywhere,” he said.
Bilateral payments to India and Russia are made in Indian Rupees. For both import and export, the shipment is paid or received in rupees. Therefore, barring exchange rate fluctuations, sanctions by the West may not have any impact on payments, sources said on Friday.
Russia is one of the largest suppliers of defense products and equipment to India, mostly under government-to-government contracts.
Bilateral trade between India and Russia stands at USD 9.4 billion so far this financial year, up from USD 8.1 billion in 2020-21.
India’s main imports from Russia include fuels, mineral oils, pearls, precious or semi-precious stones, nuclear reactors, boilers, machinery and mechanical equipment, electrical machinery and equipment, and fertilizers.
The major items exported from India to Russia include pharmaceutical products, electrical machinery and equipment, organic chemicals and vehicles.
In the past too, India had devised a mechanism to pay for imports from Iran when sanctions were imposed on the Persian Gulf nation.
India had entered into an agreement with Iran to conduct trade-related transactions through a rupee account maintained with a state-owned lender.
As per the mechanism, Indian importers deposited payments in rupees in the ‘Vostro’ account of Iranian banks maintained with Indian state-owned lender UCO Bank for imports including crude oil.
The account was also used to make payments to Indian exporters to ship goods to Iran and payments were settled on a daily basis.
Russia on Thursday launched a military operation against Ukraine, the biggest attack on a European state since World War II.
Meanwhile, EU leaders are putting up a united front and agreeing on a second package of economic and financial sanctions against Russia.
At the United Nations, officials set aside $20 million to promote UN humanitarian work in Ukraine. separately, united nations security council Voting is expected on Friday on a resolution condemning Russia and calling for the immediate withdrawal of all its forces. However, Moscow is sure to veto it.
Meanwhile, the Finance Minister Nirmala Sitharaman Said on Friday that restoration of peace is necessary for the sustained recovery of the world as well as India’s economy hit by the pandemic.
He said that India’s development is being challenged by these global disturbances, which threaten world peace and global value chain.
“No country can plan for its recovery today, especially in an era when global value chains that have already brought us closer to each other… will be severely disrupted for countries everywhere,” he said.
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