Russia Not Interested In Buying Rupees Including Fuel Imports To India

Talks between India and Russia regarding currency have been put on hold. Discussions regarding the use of ruble and rupee instead of dollars for commercial purposes between the two countries have been stopped. India imports petroleum and coal in large quantities from Russia. As a result of this, the level of rupee payable to Russia will increase. The gap has been widened by the lack of proportionate exports from India to Russia. It is estimated that $4,000 crore or Rs 3.2 lakh crore will remain in Russia a year. It can be used only for imports from India. Due to this, Russia’s lack of interest hindered the negotiations.

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There is a strong concern that this will adversely affect the importers of cheap coal and crude oil from Russia. It was hoped that a permanent system of payment through Rs. It was also estimated that this would reduce the costs of exchanging currency.

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Russia is not in a position to fully convert the rupee at present. The main reason is that imports to India are high and exports from here are low. India’s share in global exports is only about 2%. Because of this, there is no need for other countries to hold Rs.

After Russia’s invasion of Ukraine, discussions about the two countries trading in Rupees and Rubles became intense. Currently, India is paying the price of Russian crude oil in USD and UAE Dirham.

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Since the start of the war, fuel imports from Russia to India have increased dramatically. Imports were $10.6 billion at the start of the war on February 24, 2022, but by April 2023, they were $51.3 billion. This is almost a 12-fold increase. At the same time, India’s exports have declined from $3.61 billion to $3.43 billion.