Shyam Saran said the rupee agreement did not comply with the new level of Russian-Indian relations.
The intergovernmental agreement, signed 10 years ago, makes the non-convertible rupee the currency of Russian-Indian export and import operations.
Given that Russia has become a market economy and many Indian companies have been privatized, Saran proposed spending the country's existing rupee debt, worth $2 billion, on joint investment projects in India.
He said Russia could invest in the energy sphere, including the development of oil and natural gas fields, the Sakhalin-III energy project and others.
Saran also said Russia's involvement in the construction of two natural gas pipelines, Iran-Pakistan-India and Turkmenistan-India, via Afghanistan and Pakistan will be on the agenda for Singh's visit.
He said an agreement on the protection of intellectual property in the military and technical spheres would be signed during the visit.
