New Delhi: India expects $8-9 billion in bilateral trade with Russia and Sri Lanka in the next two months after allowing international trade in the rupee, India’s commerce secretary said.
The Reserve Bank of India last month allowed importers and exporters to pay in partially convertible rupees, which is widely seen as facilitating trade with Russia and South Asian neighbors instead of relying on the dollar.
“Rupee-denominated sales will be a big, big gain,” BVR Subrahmanyam told reporters late on Tuesday. “I see $8-$9 billion trade with Russia and Sri Lanka in the next two months.”
He did not break down the trade by country.
India’s imports from Russia, mainly crude oil, rose nearly five-fold to more than $15 billion between late July and February 24, when Russia invaded Ukraine, a source with direct knowledge of the matter said.
But exports fell from $1.34 billion to $852.22 million in the same period, due to the lack of an approved payment settlement mechanism with Russia.
Recent trade figures between India and Sri Lanka, which is in economic crisis, were not immediately available.
India has refrained from condemning Russia, with which it has long-standing political and security ties, while calling for an end to violence in Ukraine. New Delhi defends its purchases of Russian goods as part of an effort to diversify supply, arguing that a sudden halt would raise world prices and hurt its customers.
According to the latest preliminary trade data, India posted a record trade deficit of $31.02 billion for July, three times higher than in the same period last month, due to falling exports and higher imports.
Subramanian said the government is working on new trade deals with countries like the United Kingdom that will boost its exports and offset weak demand in some of its markets.
They expect India’s merchandise exports to touch $500 billion in the current fiscal year that began April 1, up from about $420 billion in the year-ago period.