Moscow and New Delhi have agreed to move away from the dollar and euro in mutual trade, Zamir Kabulov, a senior official at the Russian Foreign Ministry, told RIA Novosti on Wednesday.
Although the two countries have decided to switch to national currencies, a full-fledged transition won’t be possible until remaining trade imbalance issues are resolved, Kabulov explained.
“India still buys from us more than five times than it sells. Specialists are working on this, looking for a reasonable compromise,” the diplomat said.
Moscow and New Delhi have already successfully established a mechanism for mutual settlements in rubles and rupees. The Indian government permitted the national currency to be used in international trade settlements last month, in an effort to promote exports and reduce the rupee’s dependence on the dollar. The move is also seen as an incentive to boost trade with Moscow.
India’s exports to Russia slumped by about a third in April-July due to sweeping Western sanctions imposed on Moscow. However, according to the Federation of Indian Export Organizations (FIEO), rupee settlements could help reduce the trade deficit with Russia.
Earlier this month, media reported that several Russian banks had received permission to open rupee accounts in Indian banks for trading purposes.
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