India’s central bank is in initial consultations on a rupee-rouble trade arrangement with Moscow that would enable exports to Russia to continue after western sanctions restricted international payment mechanisms.
The talks, which would allow India to continue to buy Russian energy exports and other goods, risks angering Washington and its allies as they seek to punish Moscow for its war on Ukraine.
A senior banker briefed on discussions said the Reserve Bank of India (RBI) was consulting with the government and state-owned banks to assess the scale of rupee-rouble payments required and which banks would be equipped to provide the service.
The person described the exercise as “stocktaking”, adding that a final decision on the proposal was up to the government.
“We have requested the government to have [the rupee-rouble] arrangement,”
Dr A Sakthivel, president of the Federation of Indian Export Organisations (FIEO), told the Financial Times. “So [the] government is working on it. Very soon I think we’ll get this.”
India’s finance ministry declined to comment. The RBI did not respond to a request for comment. The State Bank of India, the biggest state-owned lender, declined to comment.
Sammy Kotwani, president of the Indian Business Alliance in Moscow, characterised the possible mechanism as “I can give roubles to Sberbank and they can give me rupees in India”.
Western countries have imposed sweeping sanctions on Russia’s central bank and cut several of its lenders off from the Swift financial messaging system. But India, which has longstanding ties with Russia, its most important supplier of military equipment, has remained neutral.