India and Russia are seeking to cut dependence on foreign currencies like the dollar that leave a hanging threat of unilateral sanctions and have increased trade using the Rupee-Rouble route five-fold since the Modi government has taken over.
Speaking with ET, deputy ambassador Roman Babushkin shared that over 30% of bilateral trade is now in national currencies and said that additional measures to increase this will be discussed during the upcoming bilateral talks between prime minister Narendra Modi and President Vladimir Putin in Vladivostok next month.
“In the past six years, there has been a five fold increase in payments in national currencies from about 6% to over 30% now. This has made business operations more comfortable and in some ways we were forced to use this practice to avoid a situation when our economic interaction was depending on a universal currency like the dollar,” Babushkin said.
India, which has a robust defence partnership with Russia, is currently facing the threat of unilateral sanctions by the US for the purchase of the S-400 air defence systems and other military equipment. The two sides have found a non-dollar route to make payments but the threat of sanctions pushed back the project by several months.
The Russian diplomat said that discussions in Vladivostok will revolve around increasing trade, with an ambitious target of $30 billion annually by 2025. Currently, the bilateral trade stood at around $11 billion but Russia is seeking to increase this by opening up opportunities in its far east that is hopes will bring joint projects into play.
The two sides are also looking at starting a direct trade route between Vladivostok and Chennai, that would cut down shipping time by half to just over 20 days from the current route.
Source : Times Of India