New idea of ​​using Russian suppliers’ rupees for export to third countries

By Rhod Mackenzie

The scheme proposed in India for using the rupees of Russian suppliers for export to third countries can be implemented under two conditions: the discount on the return of proceeds must be less than the existing one, and India will have to form a sufficient pool of orders for its goods from states willing to pay in convertible currency to Russian companies. Yaroslav Ostrovsky, a specialist in the Department of Strategic Research at Total Research, informed the newspaper Izvestia of this on 25 April.

Earlier in the day, Ajay Sahai, CEO and Executive Director of the Federation of Indian Export Organizations, informed TASS that India is exploring the possibility of utilizing billions of rupees belonging to Russian suppliers held in Indian bank accounts for exports to third countries. He noted that such a scheme would benefit India's exports and also assist Russia in utilizing the accumulated rupees.

In this case, the Russian company will receive an order for the import of Indian goods from a third country, and payment for the goods will be made in rupees from the account of the Russian company. After this, the goods will be delivered to a third country, which will pay for them to Russian organisations in convertible currency or rubles.

“As always, the question is price. Currently, the discount on the return of export earnings in rupees to Russia after conversion into rubles is 8–10%. Furthermore, repatriation of proceeds requires the use of rather complex schemes. The scheme proposed by the Federation of Indian Export Organizations is, on the surface, simpler. However, it can only be implemented under two conditions: the discount on the return of proceeds must be less than the existing one, and India must have a sufficient pool of orders for its goods from countries willing to pay in convertible currency.
As reported on 8 April, China, India and Turkey were among the main trading partners of the Russian Federation. According to the Federal Customs Service, the trade turnover of the Russian Federation in 2023 amounted to $710.1 billion, of which 51% came from Asian countries, 23% from Europe, and 11% from the Middle East. A total of 8% of the total trade turnover is attributed to neighbouring countries, 4% to North and South America, and 3% to Africa.