Latest On Russia-India Trade And Ruble-Rupee Payment Corridors

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Dezan Shira & Associates offices across Asia have been examining the sanctions and financial issues concerning trade with Russia, and we will be continuing to update as developments occur. Concerning Russia-India bilateral trade, as of now major banks (Bank Otkritie, Novikombank, Promsvyazbank, Bank Rossiya, Sovcombank, VEB, VTB, Sberbank) in India have suspended remittances between Russia and India in view of the sanctions imposed by the west on the use of the SWIFT system on remittances to or from Russia.

However, India is working on a mechanism to facilitate trade with Russia using local currencies, that is a Ruble/Rupee trade. The Government of India is discussing how trade can be settled in Rubles and Rupees as Indian exporters are awaiting payments of millions of US dollars that have been frozen after sanctions were imposed on Russian banks. It is important to recognize this money still belongs to Indian merchants if it has not been delivered to the Russian vendor and should be returned to India as opposed to being ‘frozen’.

As an alternative, the Reserve Bank of India, the State Bank of India, and the UCO bank have been asked to set-up mechanisms to establish the Rupee/Ruble trade. The underlying principle of this mechanism is that Rubles will be deposited into an Indian bank after converting it into Rupees and vice versa. However, certain challenges exist, such as how to peg the currencies, and how to balance the trade as India is a net importer of Russian goods. China has recently allowed a 10% trading band either way in terms of Ruble-RMB Yuan daily currency movements, it is possible a similar FX structure could be adopted for Ruble/Rupee transactions given the Rubles current volatility.

Many Indian banks already have Ruble nostro accounts, but are awaiting guidelines from the government of India to carry out the transactions. These are expected shortly.

We will keep you updated as soon as we learn more about the establishment of the Rupee/Rouble payment mechanism between India and Russia. See also India Briefing or contact our offices in India for assistance.

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About Us

During these uncertain times, we must stress that our firm does not approve of the Ukraine conflict. We do not entertain business with sanctioned Russian companies or individuals. However, we are well aware of the new emerging supply chains, can advise on strategic analysis and new logistics corridors, and may assist in non-sanctioned areas. We can help, for example, Russian companies develop operations throughout Asia, including banking advisory services, and trade compliance issues, and have done since 1992.

We also provide financial and sanctions compliance services to foreign companies wishing to access Russia. Additionally, we offer market research and advisory services to foreign exporters interested in accessing Russia as the economy looks to replace Western-sourced products. For assistance, please email or visit