India and Russia Could Have a Rupee-Ruble Trade Agreement Early Next Week
Russia and India could bring back a payment arrangement from the Cold War-era that would allow Indian exporters to keep doing business with Russia without the use of US dollars (the primary international trade currency), CNBC reported.
A Sakthivel, president of the Federation of Indian Export Organizations (FIEO) told the news outlet that "the Indian government is working on a proposal to allow four to five nationalized Indian banks to be engaged in the trade, and there have been consultations between the central bank governor, the finance minister and banks," the report reads.
Russia is currently banned from several international payment mechanisms following its invasion of Ukraine. But this trade agreement would create "a lot of opportunities for Indian firms to enter Russia," Sakthivel told CNBC.
This move comes as the western countries continue to implement tough economic sanctions on Russia, and runs the risk of "endangering political relationships with Western countries down the road," a Markets Insider report reads.
India's finance ministry and the Reserve Bank of India have not yet commented.