96% of Russia-India Trade Now Conducted in Rupees and Roubles: Sberbank

Around 96 percent of trade transactions between Russia and India are now being conducted in Indian rupees and Russian roubles, according to Ivan Nosov, head of Sberbank’s operations in India.

Speaking in New Delhi, Nosov said Russia and India had established a stable rupee-rouble payment mechanism, allowing most financial transactions between the two countries to be completed within minutes.

He said the use of local currencies had helped protect bilateral trade from external financial restrictions and reduce dependence on the US dollar.

However, Nosov said extending the Russia-India local-currency model directly to all BRICS member states would not be easy. He pointed to differences in trade volumes, financial systems, currency values and access to global markets among BRICS economies.

China’s yuan has a broad international trade network and relatively wider acceptance, while India is rapidly expanding its digital payment infrastructure.

Indian economists have also noted that a major challenge for Russia is finding effective ways to reuse the large volumes of Indian rupees it receives through bilateral trade.

BRICS members Brazil and South Africa could also benefit from greater use of local currencies in trade, but the limited international reach of their currencies could make it difficult to establish large-scale alternative payment mechanisms.

Economic experts say BRICS countries are currently not focused on creating a common currency. Instead, they are seeking to increase trade in local currencies, develop alternative payment systems and reduce dependence on the US dollar.

The upcoming BRICS summit in New Delhi is expected to discuss local-currency trade, alternative payment mechanisms and reducing reliance on the US dollar as key economic issues.