India’s trade with Russia has been affected due to the difficulties in payment because of sanctions on major Russian banks .
The Reserve Bank of India has approved 34 applications of different Russian banks for opening rupee accounts with Indian banks to facilitate two-way trade in view of sanctions, minister of state for commerce and industry Apupriya Patel said on Wednesday.
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The accounts have been opened by Russian banks in 14 Indian commercial banks, the minister said in a reply to a question in Lok Sabha.
The accounts have been opened as per the guidelines issued by RBI on July 11, 2022 on opening Special Rupee Vostro Accounts (SRVA) by foreign banks in Indian commercial banks.
The minister said to sustain and increase India’s exports to Russia the government has taken several steps like payments in national currencies, smooth operationalization of the International North South Transport Corridor and the Eastern Maritime (Chennai-Vladivostok) Corridor.
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India’s trade with Russia has been affected due to the difficulties in payment because of sanctions on major Russian banks including their disconnection from SWIFT, problems in insurance and reinsurance coverage.
Another issue impacting trade with Russia was logistics as the major shipping and logistics companies do not serve Russia bound cargo, the minister said.
Following the start of the conflict in Ukraine, Russia has become the fourth largest source of imports for India. India’s imports from Russia grew 368% year-on-year in the last financial year to $46.2 billion.
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In 2022-23, Russia emerged as the second biggest source of crude oil. Crude oil imports from Russia in FY 23 stood at $ 31.02 billion, growing at 678% on year. Other major commodities imported from Russia are coal and fertilizers.
India’s exports to Russia last financial year contracted by 3.31% to $ 3.14 billion.
