Aditya Shrivastava*
India is developing mechanisms for cooperation with Russia within the face of Western sanctions. Consistent with the govt. of Narendra Modi has created a working group that may study the impact of anti-Russian sanctions on the country's economy and take measures to shield cooperation with Moscow from the economic war unleashed against it. In Delhi, they're discussing the transition to settlements in rubles and rupees. Energy remains one in every of the key areas of cooperation. In keeping with Deputy Prime Minister of the state Alexander Novak, Moscow is hoping on attracting Indian investment within the Russian oil and gas sector and developing a sales network with the participation of Russian companies in India.
India was one in every of the countries that abstained from voting on a UN General Assembly resolution condemning Russia for conducting a "special military operation" in Ukraine. As Prime Minister Narendra Modi emphasized, Delhi takes a neutral position in reference to the Ukrainian conflict, calling for peace and dialogue. Meanwhile, India was one in every of the primary in Asia to feel the implications of the unprecedented economic sanctions imposed by the US and its Western allies against Russia. In step with leading Indian media, the disconnection of variety of Russian banks from the SWIFT system led to a paralysis of the settlement system in bilateral trade, in reference to which Indian exporters were unable to receive about $500 million for goods already sent to Russia - bank payments hung.
According to the diplomat, representatives of the profession on each side express concern about the present situation. “We will work together to seek out the simplest ways forward for our common interests, given the new realities that have arisen,” Mr. Kapoor said. Having not joined the sanctions war, despite US pressure, India is trying to find ways not only to take care of, but also to extend business cooperation with Moscow, trying to work out new opportunities within the current crisis.
Prime Minister Modi has initiated the creation of an interagency unit to check the impact of Western sanctions against Russia on the Indian economy, the citing government sources. The panel, chaired by Secretary of Economic Affairs Ajay Seth, included representatives from the Ministries of Food and Consumer Affairs, Fertilizer, Trade, Foreign Affairs, and Oil and gas.
The main attention are paid to finding solutions to issues associated with the impact of sanctions on the import of fertilizers, oil, and oil from Russia, furthermore because the implementation of payments under trade contracts. Recall that India is one in all the leading importers of those goods on the globe market, and their shortage within the event of interruptions in supplies from Russia can disperse food inflation and complicate the start of the spring agricultural season.
The government is anticipated to appoint a bank that, under the sanctions, will conduct transactions in trade with Russia using the ruble and rupee settlement system. It’s assumed that the Russian side will use the rupees it receives from Indian importers to get goods in India, and Indian exporters, respectively, will use the rubles that Russia pays to buy Russian imports. The conditional rate of exchange of the ruble and rupee is pegged to a global currency.
India expects to shop for Russian fossil fuel and oil products at a reduction if the system of transactions in rubles and rupees is put in situ. “Russia offers oil at a significant discount. We are going to be happy to shop for it, “a source within the Indian government quotes (the sanctions imposed by the West on Russia don't prohibit India from buying Russian oil).
Recall that India is that the assemblage oil importer, but Russian oil still accounts for two.3% of the full volume of crude purchased by the country. In keeping with me, the mechanism for paying for the acquisition of oil and other goods through transactions in Indian rupees and rubles is barely being developed, and it's not yet clear what proportion Russian oil and at what discount India are able to purchase. The creation of a settlement mechanism in national currencies per the ruble-rupee scheme is confirmed by the Indian newspapers, citing its sources within the government. “We are acting on a currency agreement to facilitate trade, especially as we also arrange to increase our oil purchases from Russia,” an Indian government official told.
The transition to settlements in national currencies is of key importance for the speedy resumption of trade between Moscow and capital of India. Additionally to hydrocarbons and fertilizers, India buys military-industrial and atomic power products from Russia. Additionally, India, which granites 95% of the world's diamonds, will still import Russian rough, as new US sanctions, because it clad, don't prohibit this. In turn, Delhi exports pharmaceutical, agricultural and other goods to the Russian Federation.
Recall that the trade turnover between Russia and India last year amounted to about $ 12 billion - a record figure within the history of Russian-Indian trade relations. Increasing the amount and diversification of Russian-Indian trade was one in all the most topics of the December 6 last year summit of Russian President national leader and Indian Prime Minister Narendra Modi in Indian capital. “The parties noted that the prevailing volume of bilateral trade doesn't correspond to the potential of the strategic partnership between Russia and India. The leaders of the 2 countries stressed the requirement to accentuate efforts to extend mutual trade order to realize the target of $30 billion by 2025," the joint statement "Russia-India: Partnership for Peace, Progress and Prosperity", adopted at the tip of the summit, says.
It is noteworthy that already in December last year, Moscow and New Delhi agreed to continue working together to market mutual settlements in national currencies to cut back costs and time, moreover because the risks related to payments. Confirmation that energy remains one in every of the key promising areas of bilateral cooperation was a conversation on March 10 between Russian Deputy Prime Minister Alexander Novak and Indian Minister of Petroleum and gas, Urban Development and Housing Hardeep Singh Puri. During the conversation, the parties noted that current projects still be implemented in a very stable mode. “Our relations are within the nature of a very privileged strategic partnership, the leaders of our countries are in constant contact. Interdependent cooperation is being actively promoted within the Arctic LNG-2 and Sakhalin-1 projects. LNG is being delivered to India through Gazprom. Systematic work continues with Indian partners through Rosneft. We have an interest in further attracting Indian investments to the Russian oil and gas sector and developing a sales network with the participation of Russian companies in India.
*Author is alumni of Amity Institute of International Studies and President of Bharat-Russia.in
