Russian Foreign Minister Sergey Lavrov commented on the suspended negotiation of bilateral trade in rupees between India and Russia, stating that Russia has accumulated billions of rupees in Indian bank accounts that need to be transferred to another currency. This was discussed after the SCO Council of Foreign Ministers Meeting in Goa, India. The issue of Rupee-Rouble trade talks remains unresolved after India failed to convince Russia to keep rupees in its coffers, and Russia views Rupee accumulation as “not desirable.” The SCO Foreign Ministers’ meeting in Goa saw bilateral talks between S Jaishankar and Lavrov, with both agreeing to follow a fair multipolar system of interstate relations, indirectly hinting at western economic sanctions in the wake of the Russia-Ukraine war.
Russian Foreign Minister Sergey Lavrov comments on India-Russia Rupee trade talks
Russian Foreign Minister Sergey Lavrov has commented on India and Russia’s Rupee trade talks, stating that Russia has accumulated billions of Rupees in Indian bank accounts, but to use this money, it needs to be transferred to another currency. Lavrov’s comment comes after it was reported that India and Russia have suspended the negotiation of bilateral trade in Rupees.
The Issue
India had been exploring a Rupee settlement mechanism with Russia shortly after the invasion of Ukraine in February 2022, but after months of negotiations, India failed to convince Russia to keep Rupees in its coffers. An Indian government official had told Reuters that Russia believes that it will end up with an annual rupee surplus of over $40 billion if a rupee settlement mechanism is established due to a high trade gap that favors Russia.
Lavrov’s Comments
When asked about the suspension of Rupee-Rouble trade talks in a press conference following the SCO Council of Foreign Ministers Meeting, Russian Foreign Minister Sergey Lavrov said, “As for the rupees, this is a problem. Because we accumulated billion of rupees in Indian bank accounts. We need to use this money, but to use this money it needs to be transferred to another currency and this is being discussed now.”
India’s Trade
India’s imports from Russia have increased from $10.6 billion to $51.3 billion since Russia’s invasion of Ukraine in February of last year. Discounted oil has made up a significant portion of India’s imports, surging twelve-fold during this period. Meanwhile, India’s exports to Russia slightly declined from $3.61 billion to $3.43 billion.
SCO Meeting
The two-day SCO Foreign Ministers’ meeting kicked off in Goa on Thursday, with Jaishankar holding several bilateral talks. S Jaishankar met Russian Foreign Minister Sergey Lavrov, and both sides agreed to follow a ‘fair multipolar system of interstate relations’, indirectly hinting at the western economic sanctions in the wake of the Russia-Ukraine war.
Denial of Reports
A Russian official denied reports that there had been no change in bilateral developments, and it was only “wishful thinking by Western news agencies,” according to ANI.
India and Russia have been in negotiations to establish a Rupee settlement mechanism, but the recent suspension of these talks has led to Russia’s accumulation of Rupees in Indian bank accounts. The issue of how to use this money is currently being discussed.
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