According to TASS, Russia's state-owned news agency article published on November 9, 2022, the mechanism of settlement in national currencies between India and Russia has not gained traction yet, partly due to fears of US sanctions and a trade imbalance in favor of imports from Russia, the Economic Times newspaper reported on Thursday, citing officials.
According to the publication, "Indian refiners continue to pay in dollars using regular banking channels for the oil they buy from Russia."
"The alternative rupee payment method devised by the Reserve Bank of India (RBI) hasn't gained traction," the newspaper wrote citing sources.
Due to the fact that India's exports to Russia far outweigh its imports, suppliers have too many rupees, which are left unused. The growth of oil imports from Russia increased the imbalance in trade. In addition, Indian creditors fear that India's move to trade settlements with Russia in rupees could lead to US sanctions, the newspaper wrote.
According to local media reports, in September the Indian state-owned UCO Bank received permission to open a special vostro rupee account for Russia's Gazprombank. In October, Sberbank and VTB Bank opened similar accounts in their branches in New Delhi.
In July, the RBI asked national financial institutions to introduce additional mechanisms for export-import transactions in Indian rupees due to growing interest from the world trading community in the country's currency, as well as in order to reduce dependence on the US dollar and strengthen the national currency.
