The Russian central bank officials had been expected to meet their counterparts to create a regulatory framework that will help sustain bilateral trade and banking operations despite the sanctions imposed on Russia for invading Ukraine, ET had reported on March 30.
“Both are still in the process of finding the right way out,” said one of the persons cited above. “It needs some more time to conclude.”
The RBI and the Bank of Russia did not respond to ET’s queries.
This was the first meeting between the two central banks after Russia invaded Ukraine on February 24. The officials assessed the technical hurdles faced by exporters and importers in the two countries. The central bank officials will consult with their own sides on the parameters to determine feasibility of the various payment options. They are likely to meet again to narrow possible gaps before arriving at a plan, sources said.
Two senior RBI officials were present at the meeting with the Bank of Russia representatives, said the people cited above.
Bilateral Trade at Feb-end: $12b
The Russian central bank officials may also meet executives in New Delhi, they said. “While the Russian delegation was larger than ours, the Indian (RBI) officials assessed every aspect of possible solutions amid the evolving scenario,” said a senior government official aware of the development.
Russia has been isolated from the Belgium-based SWIFT system, a widely accepted global transaction facilitator. This caused payment difficulties for companies sending goods to and receiving them from Russia.
Of late, India’s exports to Russia have resumed with containers carrying goods including tea, rice, fruits, coffee, marine products and confectionery shipping out last week. Banks led by Russia’s largest lender, Sberbank, are facilitating settlement of bilateral trade moving through ports in Georgia, ET reported on April 9.
Bilateral trade between India and Russia amounted to $11.87 billion at the end of February in FY22, show data from Bank of Baroda Economic Research with Moscow aiming to double this in a year or two.
The share of imports from Russia is much larger than offshore shipments arriving from Indian entities.
Earlier in the week, the governor of Russia’s most industrialised state of Ryazan, Lyubimov Nikolay, met Indian entrepreneurs including those from the pharmaceutical, entertainment, water treatment and tourism industries, seeking investment and greater trade.
Pharmaceuticals, tourism, films, medical equipment, agriculture, water treatment and construction are the areas earmarked for potential trade relations, which could well be an alternative for dollar-backed trades. Hindi films, which are popular across the world, also came up for business discussions.