India Expects USD 8-9 Blns Bilateral Trade With Russia, Sri Lanka In Two Months

Trade & Policy

India Expects USD 8-9 Blns Bilateral Trade With Russia, Sri Lanka In Two Months

India expects bilateral trade worth US$ 8-9 billion with Russia and Sri Lanka in the next two months after it allowed international trade in rupees, Commerce Secretary said. The Reserve Bank of India last month allowed importers and exporters to pay in the partially convertible rupee, a move widely seen as making trade with Russia and South Asian neighbours easier instead of relying on dollars. “The rupee-denominated sales will be a big, big advantage,” B.V.R. Subrahmanyam said. “I see in the next two months US$ 8- 9 billion of trade with Russia and Sri Lanka.” India’s imports from Russia, mainly crude oil, jumped nearly five times to more than US$ 15 billion between February 24, and July compared to the previous year. But exports fell to US$ 852.22 million from US$ 1.34 billion in the same period, due to the lack of a payment settlement mechanism with sanctioned-hit Russia. India has refrained from condemning Russia, with which it has longstanding 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 supplies and argues a sudden halt would jack up world prices and hurt its consumers. India reported a record trade deficit of US$ 31.02 billion for July, three times higher than in the same period last month, due to a fall in exports and high imports, according to the latest preliminary trade data. Subrahmanyam said the government was working on new trade deals with countries like the United Kingdom that would boost its exports and offset demand weakness in some of its markets. He expects India’s merchandise exports to jump to about US$ 500 billion in the current fiscal year that started on April 1, from about US$ 420 billion in the year-ago period.