Explained: Why Russia-India trade in rupees is a big deal
In recent years, the Reserve Bank of India introduced a way for Indian and Russian banks to settle payments directly in rupees, skipping the US dollar.
This move is designed to keep business flowing between the two countries, especially with all the global sanctions and payment hurdles right now.
What's the new system all about?
Indian banks can now open Special Rupee Vostro Accounts (SRVAs) for Russian banks—no extra paperwork needed.
These accounts let both sides pay each other in rupees, mostly for things like oil imports. It saves money on currency swaps and shields businesses from wild exchange rates.
Plus, Russians can invest leftover rupees into Indian government bonds or projects.
Russia and India's trade has been hit by sanctions
Sanctions and rouble swings have made trading tough for India and Russia lately.
To fix this, both countries are working on flexible exchange rates, new ways to confirm payments, and even teaming up with the UAE for three-way settlements.
The big idea: make trade easier without relying so much on dollars—and give the rupee a bigger role globally.