New Delhi and Moscow will identify ‘promising areas’ where billions of rupees stuck in Indian banks’ accounts can be invested
India will offer Russia options to invest the billions in rupees it has accumulated for exports, Foreign Minister Sergei Lavrov said on Sunday before departing from New Delhi where he attended the G20 leader’s summit.
Moscow and New Delhi are constantly in touch with each other on the bilateral matter, including the payment issues, the minister told media.
“We have recently met with my counterpart S Jaishankar and discussed bilateral issues, including the issue of trade settlement. In the current situation, Russia has billions of rupees accumulated in the accounts of Indian banks, and we are discussing how they can be used. And our Indian friends have conveyed they will suggest the promising areas where these funds can be used as investments,” Lavrov stated.
The minister noted that other bilateral agreements, including in the defense sector, are progressing as per the plan, despite difficulties with payments caused by sanctions imposed by the US and its allies.
Earlier, Indian media reported that payment issues impacted the major defense deals between Moscow and New Delhi, including the delivery of the remaining S-400 Triumf air defense systems to India. However, Russian defense officials and diplomats have refuted the rumors, affirming the ongoing deals and the deliveries have been on track.
Although India and Russia initially agreed to settle their trade transactions in rupees after establishing the framework, the system failed to gain traction as anticipated. Moscow quickly amassed a surplus of billions of rupees due to New Delhi’s substantial oil purchases.
In the last year, Russia has risen as a leading oil supplier to India. They have increasingly settled a larger portion of their trade deals in their respective national currencies, while also redirecting shipments towards the east. However, as imports from India have remained stagnant, over $40 billion rupees have accumulated in the special vostro accounts which Indian banks hold for Russian banks in the domestic currency. Russian companies were unable to repatriate these rupees due to local currency restrictions.
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