Indo-Russian Trade balance to improve through national currency settlements

The balance of trade between Russia and India will improve through settlements in national currencies, which are of great importance, said Subrahmanyam Jaishankar in a joint business forum in Mumbai.

“Mutual settlement of trade in national currencies is of great importance, especially in the current circumstances,” he said.

“Special Rupee Vostro Accounts are right now an effective mechanism. However, even in the short run, a better trade balance with national currency settlements is the answer,” the minister added.

The signing of a bilateral agreement between the customs authorities of the two countries in May 2024 on Authorized Economic Operators has had a big impact on smoothening the ease of doing trade, he noted.

Jaishankar also emphasized the importance of the task to develop a Comprehensive Economic Partnership, which was set by Prime Minister Narendra Modi and Russian President Vladimir Putin at the annual summit in Moscow in July.

“In fact, they have also charged us with developing a Program of Economic Cooperation till 2030, on which work is currently underway,” he said.

India and Russia are also studying development of trade routes such as the International North-South Transport Corridor (INSTC), Chennai-Vladivostok Corridor and the Northern Maritime Route, added Foreign Jaishankar.

“The three connectivity initiatives between us, as mentioned by the First Deputy PM [of Russian Denis Manturov] as well – INSTC, Chennai-Vladivostok Corridor and the Northern Maritime Route – all need continued attention, if we are to realize full potential,” he said.

The minister expressed confidence that the business community in both countries would appreciate the strong direction given by the governments of the two countries to take forward trade and investment ties.

“It is natural that there would be concerns, such as banking and payment related issues, logistical challenges like shipping, insurance and reinsurance as well as market access. Obviously, we have to find solutions that work to the comfort level of those actually involved in trade.

I am confident that today’s gathering and the sessions that follow would facilitate an open exchange of views in this regard, with the expectation of coming up with mutually beneficial and workable answers,” he said.