The government of India is considering Rupee payment options for trade with Russia after the latter is banned from the SWIFT international payments system, Bloomberg reported citing sources. A decision after the consultation with the Reserve Bank of India, State Bank of India, and UCO Bank is expected within this week.
The development comes amidst heavy sanctions imposed on Russia after it invaded Ukraine. According to the report, Indian exporters are awaiting payments worth $500 million from Russian Banks. Earlier, Reuters reported that India is expecting imports of 8,70,000 tonnes of coking coal by March 20. According to the report, vessels carrying at least 1.06 million tonnes of coking coal are set to get delivered at Indian ports this month.
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As per the latest data, the bilateral trade between India and Russia, stood at $10.8 billion, accounting for less than 1.5 per cent of the South Asian countries. Russia is a major exporter of defense equipment, edible oil, and crude oil in India. The government is preparing a list of items that can be exported to Russia, to narrow its trade deficit worth $5 billion. According to the Bloomberg report, India is looking forward to have a floating exchange rate instead of a fixed one. If the payment in Rupee gets approved, India would receive export items at a more affordable and cheaper price.
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Meanwhile, according to the data released by the Ministry of Commerce on Monday, India’s trade deficit widened to $20.88 billion in February 2022.
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