Michael Patra, the deputy governor of the Reserve Bank of India (RBI), the country’s central bank, said on Friday, June 24 that New Delhi and Moscow are trying to work out a mechanism to facilitate trade between the two nations based on their respective national currencies, rupees and rubles. Patra spoke at an event organized by Indian business advocacy group PHD Chamber of Commerce and Industry in New Delhi.
Bilateral trade between the two countries stood at $8.1 billion in 2020-21, he reported, adding that both sides have set a trade target of $30 billion by 2025. India has recently increased its purchases of Russian oil very significantly, which has put the rupee-ruble issue on the front burner. Patra noted that there had been a rupee-ruble payment mechanism in place during the Cold War before the collapse of the Soviet Union, which could be revived, and said that Western sanctions were driving many countries to seek alternative payment arrangements. “The rules (governing financial institutions) and the protocols will diversify around the world. These changes are already underway,” he argued.
