INSUBCONTINENT EXCLUSIVE:
matter said, asking not to be identified as the discussions are private
No payment has been initiated because Russian banks do not want excess rupee piling up, they said
from Moscow to contain a rising import bill amid high commodity prices
The mechanism worked as a template to draw out similar arrangements with other nations such as Mauritius and Sri Lanka.Slow progress in the
rupee trade with Russia could add to pressure on the local currency which slipped the most against the dollar among emerging Asian
currencies in the past 12 months
India is betting on internationalization of the rupee to reduce dollar demand and make its economy less vulnerable to global shocks after
current account deficit, the broadest measure of trade in goods and services, widened to a record in July-September.Officials from the two
nations met last month to discuss ways of enhancing exports to Russia in areas such as electronics so that the rupee trade mechanism can be
brought back on track as traders mull other ways of settlement
The plan to allow overseas trade to be settled in rupees was announced by the Reserve Bank of India in July
Seven months later, the mechanism is largely limited to payments for import of defense equipment, the people said.Payment in rubles is also
a challenge because there is no fixed exchange rate for the currency, a Bharat Petroleum Corp
Russia is now the biggest supplier of crude oil to India overtaking Iraq and Saudi Arabia
While crude continues to dominate their bilateral trade, imports of items such as sunflower oil and fertilizers have also jumped in the past
