Rupees and rubles deals India wants to step up trade with Russia
April 2, 2022, 8:35 pm
India does not follow Western sanctions. Instead, the country announces that it will increasingly buy goods from Russia. The Russian Foreign Minister is pleased. During his visit to New Delhi, Lavrov highlighted the friendship between the two countries.
Russian Foreign Minister Sergei Lavrov was visibly pleased after his visit to India. “We are friends,” he said during a performance with singer Subrahmanyam Jaishankar in New Delhi. He then added, “We are ready to supply any goods that India wants to buy.” After his visit to China, Lavrov this week visited India, a country that is already one of the biggest buyers of Russian raw materials. In light of the EU’s announcement that it would bid farewell to Russia’s coal, oil and gas supplies as soon as possible, Moscow is currently looking at specific alternatives in Asia. In addition to India, Indonesia, a G20 country, had already signaled interest in buying Russian oil.
India – after China, the most populous country in the world – is of particular importance to Russia. The world’s largest democracy has not adhered to Western sanctions for the Russian invasion of Ukraine, but is following a largely neutral course. Although New Delhi has called for an immediate ceasefire in Ukraine, it has refused to explicitly condemn Moscow’s actions. The country abstained from voting on several UN resolutions on the war.
US President Joe Biden therefore criticized the Indian course as “unstable”. Because at the same time the country belongs to a so-called “quad” group with the US, Japan and Australia because of China’s fears. But as much as it enjoys working together with the US against China, the Indian government is not interested in the conflict in distant Europe. Now, much to the chagrin of Europeans and Americans, there are indications that India could become one of the beneficiaries of the Western conflict with Russia, thus supporting the government in Moscow.
So far, Russia is India’s main supplier of defense supplies, but the combined annual trade between the two countries is still small. The average has been just $9 billion in recent years, mostly fertilizer and a little oil. For comparison, India’s bilateral trade with China amounts to more than US$100 billion a year. But given the steep discount on Russian oil since the Ukraine attack, India has already purchased at least 13 million barrels, compared with nearly 16 million barrels imported from Russia all last year.
“National interests first”
The government in New Delhi rejects criticism from the West. “I would put my country’s national interests first and my energy security first,” Finance Minister Nirmala Sitharaman told CNBC-TV18, referring to cheap Russian oil. “Why shouldn’t I buy it? I need it for my people.” India is also considering doubling its imports of Russian coking coal for steelmaking, India’s steel minister said on Sunday. India also recently signed an agreement to buy 45,000 tonnes of Russian sunflower oil for April – to replace Ukraine’s failing supplies. “India will import more items from Russia in general, especially if there is a discount,” said a senior Indian government official.
The country could thus provide Russia with much-needed foreign exchange and serves as an example to Russian President Vladimir Putin of why he assumes he can resist Western sanctions. India is also circumventing financial sanctions against Russia, which include the exclusion of several Russian banks from the Swift settlement system. The New Delhi government is now trying to establish a rupee and ruble trading system. This could make progress in decoupling the world’s most populous countries from euro and dollar transactions.
Lavrov agrees: “It is quite clear that more and more transactions are being processed through this system in national currencies, bypassing the dollar, euro and other currencies,” he said. Both countries could use a rupee-ruble mechanism to trade oil, military equipment and other goods.
Source: ntv.de, Aftab Ahmed and Krishna N. Das, rts