India to Use Rupees in Trade Payments With Russia Starting Next Week: Export Federation

NEW DELHI (Sputnik) - India will begin using rupees in its trade settlements with Russia for some shipments starting December 19, director general of the Federation of Indian Export Organisations (FIEO) Ajay Sahai said.

"A number of issues have been sorted out. Exporters and importers have begun approaching banks for opening of the accounts [in rupees]," Sahai was quoted by an Indian newspaper as saying on Sunday, adding that trade settlements under the new payment system were expected to begin for some shipments next week.

Five-six Indian banks have already been allowed to open accounts to facilitate trade between Russia and India in rupees, a government source said.

"About 10-11 vostro accounts have been opened. For instance, there are six vostro accounts opened in IndusInd Bank which means six different Russian banks have opened accounts in the bank," the source added.

In November, The Indian Express reported, citing the results of a high-level meeting between Russian and Indian officials in September that India was set to double its trade with Russia in the foreseeable future, using the Indian rupee for settlements.

Earlier, the Indian government allowed international trade settlements in rupees to promote exports. The country's ministry of commerce and industry said that the amendments were made to facilitate and simplify international trade transactions, considering the growing interest in the internationalization of India's national currency.

According to the newspaper, the hike in trade between Moscow and New Delhi was mainly spurred by a sharp rise in India's import of Russian crude oil, with Russia accounting for around 22% of India's total crude requirement, up from a mere 1%.