India and Russia explore different payment modes for trade.
The ongoing war between Russia and Ukraine has highly impacted the Indian economy. A few days ago, finance minister Nirmala Sitharaman has flagged concern over the war going on, however, it has been said that it will not be lasting on the Indian economy. India's trade has been put in the spotlight, which has now accounted for a 0.8% share in exports and 1.5% of its imports. This means that Eastern Europe will have a limited impact on Indian industry apart from the wider ramification of rising oil prices.
The FIEO (Federation of Indian Export Organisations ) said that exporters that took consignments to the goods from the Black sea route are on hold. Ajay Sahai, the Director-General of FIFO has a quantity of impact on the duration of the war. Vladimir Putin, Russian President has announced that the military operation in Ukraine, has triggered serious concern between the two countries. India's main export for fuel, mineral oils, pearls, precious stones, mechanical appliances, boilers, machinery, and nuclear reactor are imported by Russia. Major exports from Russia are electrical machinery and equipment, organic chemicals, vehicles, pharmaceutical products. India is looking for other alternative payment options to continue trading with Russia. Identifying a potential bank, as a top panel and examining the issue by prioritizing edible oil and fertilizer imports and payment owed to India.
The top inter-ministerial panel has been the task for scrutinizing the impact of a barrage of economic sanctions imposed by the west on India's economy, which is being led by Ajay Seth the economic affairs secretary and ministries of food and consumer affairs, external affairs, commerce, and petroleum. Foreign banks have imposed sanctions on Russia and also routing the payment through Russian banks is unaffected by the curbs. Two major Russian banks, Sberbank and Gazprombank, were exempted from sanction because they were the main channel of EU's gas and oil imports for payment for Russia. Another option under consideration is the mechanism used to repay the Russian debt is through a rupee auction held by the Russian Central Bank. Repayment can be made through the export of commodities and services. India and Russia have a bilateral trade of about $10 billion, 1.3% of India's total trade. RBI and the government are in constant touch as they look into the fallout and ringfence of the economy. India does not have to hurry as there are seen to be undermining western economic sanctions on Russia.
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