After the war in Ukraine, the problem of how to use the rupee has arisen in front of Russia, surrounded by sanctions. But on the other hand, if experts are to be believed, the investment may have to be increased further to utilize the huge reserves of rupees.
According to an estimate, Russia has accumulated over two billion dollars in rupees. If sources are to be believed, Russia is running out of options to take this money out of the country. Oil trade between India and Russia has increased rapidly after the Ukraine war. But Russia is shying away from taking payments in rupees.
Proposal Related To Iran Rejected
If sources are to be believed, India has refused to accept the proposal from Russia in which Iran was mentioned. The proposal from Russia said importing Indian goods to Iran and using the reserves of rupees deposited with Russia. India believes that many diplomatic risks are associated with this proposal. Apart from this, Iran is on the gray list of the Financial Action Task Force (FATF).
At the same time, the banks of the UAE are being monitored by Western countries. Due to the investigation of currency transactions here, the way to convert rupee reserves into dirham has also been closed. Business Line has quoted sources as saying, “Russia is forced at this time because it has found it difficult to take out the reserves of rupees deposited in India.”
Why Is It Avoiding Iran
It can also not use it to pay for imports as it is not buying much from India due to issues like quality. In such a situation, now Russia will have to consider investing more in government securities and the Indian equity market, and it has always been avoiding it.
Iran agreed that it would buy Indian goods with the help of money received from Russia. Iran also agreed to open its account with the Putin government by importing goods such as aircraft equipment from Russia. But India has refused to accept it. This would not have been a diplomatically wise move if sources were to be believed, as Russia uses Iranian drones in the Ukraine war.
Russia Can Take This Step
The money deposited with Russia is only due to defence purchases and sales. India is buying Russian oil using hard currencies. India continues to purchase arms and military equipment from Russia actively. According to Russian news agencies, orders worth about $10 billion have been placed. Russia is believed to need to invest its rupee reserves in Indian government securities and infrastructure projects. Russian companies may also consider starting operations in India.
