Russia and India have significantly increased bilateral trade in recent years, especially after Western countries imposed sanctions on Moscow in February 2022. (Source: Dreamtime)

According to the Economic Times , the above issue will be discussed during the visit to Russia of the Deputy Governor of the Reserve Bank of India (RBI), scheduled this week.

Moscow and New Delhi have significantly increased bilateral trade in recent years, especially after Western countries imposed sanctions on Russia over its special military operation in Ukraine in February 2022.

The South Asian nation has emerged as the second-largest buyer of Russian crude oil, after China.

Based on the latest import data from the Indian Ministry of Commerce, the share of Russian crude in India's total oil imports has jumped from around 2% in 2021-22 to around 36% in April 2023-February 2024.

Meanwhile, India's exports to Russia increased by 59%.

Currently, banks in the world's most populous country must use the USD exchange rate to convert their national currency when processing import and export payments. However, with several leading Russian banks banned from participating in the international payment system SWIFT, the scope of currency transactions in USD has been significantly reduced.

Meanwhile, payments for oil and other imports require the services of major Russian banks. “The Rupee-Ruble payment system could provide an alternative to SWIFT,” the Economic Times quoted a banking official as saying.

The Rupee-Ruble reference exchange rate may be set by the RBI and the Bank of Russia, and then adjusted to synchronize with the underlying market reality.