Saturday, April 13, 2024

India close to setting up a payment system for trade with Russia

The central government is moving closer to setting up an alternative payments system to continue its trade with Russia, Hindustan Times reports.

A top panel is currently recognising a prospective bank and has suggested prioritising the trade of edible oil, fertiliser imports and the payments owed to India by Moscow.

Any shortage of fertilisers and edible oil will reportedly trigger food inflation in India. It will cause disruptions in the farm sector ahead of the kharif season.

Led by economic affairs secretary Ajay Seth, the inter-ministerial committee is assessing the influence of the sanctions imposed on Russia by the west due to their ongoing war with Ukraine.

Currently, consultations are being carried out with the representatives of the Reserve Bank of India (RBI), the UCO Bank Ltd, and the State Bank of India (SBI) for the same.

With the help of the Kolkata-based UCO Bank, India had instituted a similar payment mechanism to import Iranian oil when US levied sanctions on the middle-eastern country.

The concerned officer explained that New Delhi will manage to negotiate a better price for the Russian oil and gas imports.

According to the official data, India imports 11 per cent-11.5 percent of its total imports of edible oil and the muriate of potash from the Russia-Ukraine region.

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