Russia hints at intensifying trade with India in national currencies

The Russian foreign minister also lauded India's position on the conflict and said most countries understand what has been going on and the root cause of the crisis

Notwithstanding tough talks by President Joe Biden's administration, New Delhi on Friday rolled out the red carpet for Russian Foreign Minister Sergey Lavrov, who said that his country would expand use of national currencies for continuing trade with India, circumventing the sanctions imposed by the western nations on it.

Lavrov not only had a meeting with his counterpart and External Affairs Minister S Jaishankar, but also called on Prime Minister Narendra Modi – a day after a senior official of the Biden administration warned India of “consequences” if it went ahead to work out a mechanism for payment in rupee and rouble to continue its trade with Russia, which had come under sanctions by the US and the other western nations for its military operations in Ukraine.

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“I would recall that many years ago we started moving in our relations with India, China (and) many other countries from using dollar and euros to more and more use of national currencies. Under the current circumstances, this trend I believe will be intensified, which is natural and obvious,” Lavrov told journalists after his meeting with Jaishankar.

After President Vladimir Putin ordered the launch of military operations in Ukraine on February 24 last, the western nations imposed sanctions on Russia. The US and the European Union excluded seven banks in Russia from the SWIFT – the most widely used system for transactions among the banks around the world.

“We don't want to depend on a system which would be closed any time and we don't want to depend on a system whose masters can steal your money overnight,” said Lavrov.

The sanctions imposed by the US and other western nations on Russia has made it difficult for India to pay for its imports from the former Soviet Union nation. India is now exploring a rupee-rouble payment system to continue its trade with Russia.

Also Read | US warns India against entering into rupee-rouble arrangement with Russia to dodge sanctions

“We will be ready to supply to India any goods which India wants to buy,” Lavrov said on Friday, when a journalist asked him about New Delhi's plan to buy 15 million barrels of crude oil at the discounted rate of $ 35 per barrel from Russia.

Moscow has offered to use Russia's SPFS financial messaging system for India to pay for imports from the former Soviet Union nation.

A Russian government delegation is arriving in New Delhi next week to discuss with their counterparts in the Reserve Bank of India and the Ministry of Finance of the Government of India to work out the alternative payment mechanism.

Ahead of Putin's Foreign Minister's visit to New Delhi, the US Secretary of Commerce Gina Raimondo said in Washington DC on Wednesday that India's move to buy discounted crude oil from sanction-hit Russia and to work out an alternative payment mechanism to bypass restrictions imposed by the western nations on transactions with Putin's nation was “deeply disappointing”.

Daleep Singh, the US President's Deputy National Security Advisor on International Economics, said in New Delhi later on Thursday that the nations trying to circumvent the restrictions the US imposed on transactions with banks in Russia would face “consequences”. He also said that the US would not like to see rapid acceleration of India's imports from Russia, be it energy or any other commodities.

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