Ukraine: Sanctions-hit Russia offers India bilateral trade with dual-payment plan
Virendra Pandit
New Delhi: That its inconclusive and hugely expensive invasion of Ukraine since February 24—costing around USD 50 billion per day — is biting the Russian economy, because of the tightening of Western and allies’ sanctions, has emerged: now Moscow has urged India to consider a dual-payment plan for importing oil and trading other articles.
India has a trade deficit of USD 5.5 billion with Russia. This includes over USD 3 billion worth of imports of Russian oil and petroleum products. New Delhi is also trying to export goods worth USD 2 billion to Russia to narrow the trade deficit.
According to the fresh Russian proposal, India can pay in US dollars or euros for importing petroleum products from Russia while the rest of the bilateral trade of other items can be settled through the rupee-ruble-denominated mechanism, the media reported on Friday.
It means the pressure is mounting on the sanctions-hit Russia, which is facing a dollar-euro crunch and soon cannot import even key medicines or technologies from the West and its allies.
The Central Bank of the Russian Federation’s officials is reported to have discussed last week the dual-payment offer with their Indian counterparts and the Finance Ministry. But a final decision is yet to be taken, in consultation with the Reserve Bank of India.
India is among the few major economies which have continued trade with Russia since the invasion of Ukraine, despite the West scaling back its relationship with Moscow and imposing waves of sanctions.
New Delhi has clarified that its oil imports from Russia are much less than Europe’s energy imports from Moscow. Besides, India wants to continue bilateral trade because of its dependency on Russian defense exports needed to counter China’s growing military challenges.
