‘We need to use this money’: Russia says it is unable to utilise billions of Indian rupees

Russian Foreign Minister Sergei Lavrov on Friday said that Russia has accumulated billions of rupees in Indian banks which it can’t use. This is a problem, Lavrov told reporters in Goa on the sidelines of the Shanghai Cooperation Organization (SCO) meeting, reported Bloomberg.

“We need to use this money. But for this, these rupees must be transferred in another currency, and this is being discussed now,” he said, as per the report.

His remarks came a day after news agency Reuters reported, quoting two unnamed Indian government officials, that India and Russia have suspended efforts to settle bilateral trade in rupees after months of negotiations failed to convince Moscow to keep rupees in its coffers. However, later, both countries denied the report.

India’s total exports to Russia shrunk 11.6 per cent to $2.8 billion in the first 11 months of the 2022-23 financial year, while imports rose nearly fivefold to $41.56 billion, according to data from the Ministry of Commerce and Industry. That surge came as Indian refiners have scooped up discounted Russian oil in the past year that’s been shunned by the West in response to President Vladimir Putin’s invasion of Ukraine.

According to Vortexa Ltd, a data intelligence firm, imports of Russian crude by India reached a record 1.68 million barrels a day in April, up six-fold from a year earlier.

The Kremlin initially encouraged India to trade in national currencies following sanctions on Russian banks and a ban on transactions using the SWIFT messaging system.

But volatility in the Ruble soon after the war began meant plans for a Rupee-Ruble mechanism for oil imports were abandoned. India has resisted pressure from the US to scale back relations with Moscow since the invasion of Ukraine.

(With inputs from Bloomberg)

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