Central Government and Reserve Bank of India are looking for alternatives to make payments to Russian businesses. There are smaller banks in Russia that have not been put under sanction, third country payment and local currency trade as reported by Mint.
Department o financial services and commerce, economic affairs and ministry of external affairs are brainstorming together to bring a solution to exporters and businesses that have to receive payment from Russia. Due to sanctions imposed by US, UK and EU payment channels have been blocked for transactions. The estimated amount that is due is in range of $400-500 million.
US has excluded many Russian banks from SWIFT Financial Transaction System. A government official said, “So far, SWIFT has been excluded for large banks. We could look at the other banks. But again, there are sanctions on products, so those cannot be traded. However, RBI is looking into the payments issue and will revert with the best possible way out.”
In Financial Year 2021-22, India did an import worth of 5.5 billion dollars and an export of 2.6 billion dollars. India exported pharma products worth 469 million dollars to Russia and electrical parts worth 301 million dollars. Other important export items include coffee, tea, textiles and clothes. Exports to Russia account for 0.84% of total exports and it has increased by 25% from last year.
A government official told Mint, “Feasibility of rupee-rouble trade is also being explored. But it will have its difficulties as sanctions have come into effect for all products other than agriculture, pharma and energy. Also, the rouble is not a freely convertible currency.”
A help desk was set up by commerce department for all the businesses after Russia Ukraine Conflict escalated. Most of the inquiries that were made by the exporters were about transaction related queries.