Russia wants to expand imports from India in big way

Russia has circulated a new list of products, which include items such as medical equipment, pharmaceuticals, chemicals, industrial equipment, textiles, furniture and jewellery, which are imported from India for more balanced bilateral trade and sustainable implementation of rupee denomination. wants to do payment mechanism, a person tracking the matter said. “The latest list of requests for cooperation from Russia, which has been circulated to export organizations, contains a total of 71 requests. Entries in the list are mostly inquiries from Russian companies for imports, but also include some items for potential exports. A variety of commodities—from machinery, paper, textiles, leather and motor parts to diagnostics and medicines—reflect the country’s interest in trade in products beyond food and daily essentials to close the trade gap.” The source said.

In the April-June 2022 period, India’s imports from Russia increased by 369.29 percent to $9.26 billion, while exports declined by 37.82 percent to $435.62 million. The surge in imports was fueled by a sharp increase in India’s purchases of crude from the Soviet nation after the West imposed economic sanctions on Moscow in response to its attack on Ukraine on February 24, 2022.

Buoyed by huge discounts offered by Moscow, India imported an estimated $7.9 billion worth of mineral oils, mineral fuels and their products during the period – 800 percent compared to the same period last year, per government data. increase of.

payment mechanism

“Now that India and Russia are engaged in establishing a mechanism for rupee-denominated trade to circumvent banking sanctions of the West by avoiding payments in US dollars or euros, Russia is feeling the need to increase its imports from India. Is. Purchasing more from India will allow the country to access the rupee balance that will be credited to its accounts from India’s purchases of oil and defense equipment,” the source explained.

The RBI has allowed provision for investment of surplus rupee balances in government securities or infrastructure in India, but it may be a more desirable option for Russia to use it to import goods of its interest from India.

“This is a unique opportunity for India to increase its exports to Russia, which were valued at $3.2 billion in 2021-22, while imports stood at $9.86 billion. Since India’s imports from Russia have already crossed $9 billion in the first quarter of 2022-23, the scope to push exports along with imports is immense,” the source said.

Russian companies that have requested for business with India include some established firms that have been doing business with European countries for a long time but have now closed due to sanctions. For example, Morena, one of the first refrigeration companies to appear in the Russian market, has sought to start cooperation with a reliable manufacturer of compressor equipment in India.

“Morena Tecumseh used to cooperate with France, but can no longer work with them due to the policy of both governments,” the entry said. As part of economic sanctions imposed by the European Union and the US, several Russian banks have been banned from using the SWIFT messaging system. Indian banks are working with Russian banks to implement rupee payment mechanisms, many of which are not subject to sanctions.

Published on

22 August 2022

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https://www.thehindubusinessline.com/economy/russia-keen-to-import-wide-range-of-indian-products-to-balance-trade/article65798239.ece

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