rgRussia’s trade with India is booming and bilateral payments are proceeding smoothly.
Sberbank’s Assessment
Anatoly Popov, deputy CEO of Russia’s largest lender, Sberbank, made this observation in an interview to Reuters.
Popov said this is unlike the glitches that were hampering trade with other countries
Sberbank handles payments for up to 70% of all Russian exports to India.
Russia-India Trade Doubled in 2023
Russia’s trade with India nearly doubled to $65 billion in 2023.
This happened after India became a major importer of Russian oil following the imposition of Western sanctions on Moscow in 2022 over the conflict in Ukraine.
Interest Of Russian Businesses In The Indian Market
The Sberbank deputy CEO said that in 2022, the interest of Russian businesses in the Indian market, increased significantly.
This is because this market serves as an alternative.
He made this point ahead of the Eastern Economic Forum, an economic conference targeting Russia’s Asian partners.
Sberbank Opening Accounts In Rupees For Russian Clients
“Today, we are opening accounts in rupees for Russian clients as well.’’
He added, “We do not rule out the possibility that, in addition to being a means of payment, the rupee may also become a means of savings.’’
Sberbank’s branch in India has offices in Delhi and Mumbai, as well as an IT centre in Bangalore.
The number of staff in its Indian offices increased by 150% this year.
They also wanted to hire 300 IT personnel for the hub in Bengaluru.
Sberbank Under Western Sanctions
Notably, Sberbank is under Western sanctions and therefore cannot make transactions in U.S. dollars and euros or use the SWIFT system for international transfers.
Sberbank Has Not Had Any Problems In India
However, Popov said the bank had not experienced any problems in India.
“Sberbank is a full participant in all Indian payment and interbank systems. There are no restrictions on its operations,”Popov said.
India Maintains Friendly Ties With Russia
India has not joined any anti-Russian sanctions and maintains friendly relations with Russia, a fellow member of the BRICS group of emerging economies.
Smooth Transactions
Sberbank said transactions in roubles and rupees were proceeding smoothly, with 90% of them taking only a few hours to complete.
Significantly, this is in stark contrast to other trading partners such as China.
Popov said growing Indian exports to Russia had helped solve
the problem of surplus rupees held by Russian companies, which
hampered bilateral trade in 2023, as rupees were used to pay for
imports from India.
“The problem has been solved, there is no rupee surplus any
longer,” Popov said.
India Needs to Increase Exports To Russia
He said that in order to achieve balanced trade, India still needs to increase its exports to Russia 10-fold.
An Indian source told Reuters last month that the rupees surplus had dropped to a “few million dollars”.
India, the world’s fifth largest economy, has almost everything Russian importers are looking for, Popov said.
India Is A Vast Economy
He said that India is a self-sufficient, vast economy capable of meeting its own needs.
He added, “Therefore, any goods that Russia previously
imported can be purchased in India.”
Sberbank is also developing its offering of hedging
instruments, which already includes forwards and options, as
well as other products such as rupee-denominated loans for
Russian companies at rates significantly lower than in Russia.
Popov Appreciates Role Of Indian Regulators
He thanked Indian regulators for the opportunity to operate
through rupee-denominated “vostro” accounts, which domestic
banks can hold on behalf of foreign banks in India, facilitating
their operations.
Roubles-Rupees Conversion Mechanism Functioning Well
Popov said the current mechanism of converting roubles and
rupees was functioning well and did not require any third-party
currencies for settlement.
He added that stock exchange trade in rupees would increase transparency.
(With Inputs From Reuters)
