Russia has assured to the Indian government that the trade between two nations in their domestic currencies was not restricted by the Western sanctions. Sources aware of the developments said the Russian embassy had written to the Ministry of External Affairs and the Ministry of Commerce assuring officials that trade between the two countries through a proposed rupee-ruble trade would not violate sanctions imposed on Russia by the US, UK and EU.  

Merchandise trade between India and Russia stood at $10.75 billion in the first 10 months of FY22, with India exporting goods worth about $2.8 billion and importing goods worth $7.9 billion.

“There are several options available. The point they made in the letter is that trade in rupee or ruble is not affected by sanctions by the US, UK or EU,” said a source aware of developments, adding that the letter noted there were many ways to process payments.

The issue of an alternative payment mechanism to enable India-Russia trade is likely to be taken up at Russian Foreign Minister Sergey Lavrov’s ongoing visit here.

In response to its invasion of Ukraine, Russia is facing a slew of sanctions from the EU, the US and their allies which have led to a sharp fall in the Russian stock market and in the value of the rouble. The EU has barred several Russian banks from the SWIFT messaging system that enables international financial transactions. The US has banned all energy imports from Russia and sought to restrict Russian access to high-tech components, both hardware and software, made with any parts or intellectual property from the US.