India and Russia: Russia has $50-55 billion in rubles deposited in bank accounts. These funds are not being fully utilized. India wants Russia to use them to purchase Indian goods.

You buy goods from us and pay the price in rubles... Know why India made this demand to Russia?

India and Russia: India has appealed to Russia to remove trade barriers or obstacles to Indian goods such as electronics items, engineering goods, food and beverages, and fish products. India has a strong presence in these sectors, and they are in high demand in Russia. Therefore, increasing exports is the only way forward. 

Trade between India and Russia is large, but it is not balanced. Indian oil companies have purchased large quantities of crude oil from Russia and paid for it in rubles. As a result, $50-55 billion in rubles has accumulated in Russian bank accounts, which are not being fully utilized. India wants Russia to increase imports from India and pay for goods in rubles. This will ensure balanced trade between the two countries. 

Where is the problem coming from?

According to a report in the Times of India, Indian exporters face several challenges in expanding their access to the Russian market. Russia's stringent regulations in the electronics sector, including mandatory software localization and adherence to Russian cybersecurity regulations, are making it difficult for exporters.

Russia's own stringent product standards and certification processes are also delaying shipments of engineering goods. Furthermore, the need to comply with Russian-language documentation for food, fisheries, and some machinery categories has further slowed exports.

The growing trade deficit between the two

This is why India has raised the issue of balanced trade with Russia and easy access for Indian goods to the Russian market. India continues to have a large trade deficit with Russia. This means that exports are not as high as imports.

India's trade deficit has reached nearly $25 billion in the first seven months of the current fiscal year, mostly due to crude oil imports. Meanwhile, US sanctions have led some Indian refiners to reduce their purchases of crude oil from Russia. Meanwhile, some suppliers have stepped up to meet India's needs, narrowing the trade deficit somewhat.