India and Russia are accelerating efforts to establish a rupee-ruble trade mechanism, aiming to reduce reliance on the US dollar amid growing global financial complexities. The two nations are working to create a direct payment system in their respective currencies, a step that could redefine their trade relationship by fostering greater financial independence. However, Indian banks’ caution in handling transactions with Russia, influenced by US scrutiny and sanctions threats, remains a major challenge.
While the lack of a direct rupee-ruble exchange mechanism is an issue, Russian Ambassador Denis Alipov clarified that the main obstacle is the “over-cautiousness” of Indian banksAgra Stock. “The problem is not the exchange rate,” Alipov stated, “the biggest challenge is the over-cautiousness of Indian banks regarding transactions with Russia.” He attributed this reluctance to US pressures, noting, “The US has been meticulous in tracking transactions between and Russia, even threatening sanctions.” According to Alipov, these pressures hinder India’s ability to freely engage with Russia and could restrict other partnerships if unchecked.Chennai Stock
Alipov also voiced concerns over the long-term implications of US-led sanctions, arguing that India should not be bound by the strategic interests of another country. “Today, it is necessary for India to settle its relationship with Russia; tomorrow, the US might ask India to curb its relationship with ,” he said, pointing to an ongoing need for India to safeguard its economic autonomy. The ambassador added that the growing pressure highlights the importance of creating a sustainable payment mechanism that bypasses dollar dependence and strengthens India-Russia ties.
This financial push aligns with a broader movement within the BRICS alliance to reshape global finance and voices from the Global South. “It is necessary for India, Russia, China, and other members…to have an equal voice in various issues of global financial cooperation,” Alipov said, calling BRICS an essential platform for equitable international engagement. The ambassador expressed optimism that India’s banking sector would become more flexible in supporting transactions with Russia, stressing, “India does not support those sanctions, and it should stay as such.”Hyderabad Wealth Management
Additionally, the Indian government has shown growing interest in projects within Russia’s Far East and Arctic regions, areas abundant in resources and promising for trade. “India is expressing huge interest in mutual projects in the Russian Far East,” Alipov remarked, highlighting that cooperation in these regions could pave the way for enhanced economic engagement.
The India-Russia collaboration is also visible in the defence and nuclear sectors, with Russia playing a key role in India’s nuclear energy production and contributing to indigenous defence initiatives like “AtmaNirbhar Bharat.” Alipov cited ongoing projects such as the Kudankulam nuclear plant and the BrahMos missile program, stating, “We are doing practical cooperation with AtmaNirbhar Bharat.”
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