India and Russia have consented to an arrangement that will see $40 billion worth of exchange between the two nations ditch the US dollar and utilize homegrown monetary forms all things considered. The move comes as the two countries try to support financial ties not withstanding Western approvals against Moscow over the conflict in Ukraine.
Img Credit: – Tfipost.com
Increased Bilateral Trade
At the new India-Russia yearly summit, Indian State leader Narendra Modi and Russian President Vladimir Putin reviewed trade and investment ties between their countries. They expressed satisfaction that trade growth was already showing positive signs, reaching $30 billion in previous years.
The two leaders agreed to increase efforts and work towards boosting bilateral trade to $40 billion by 2025. To facilitate this, they announced that India and Russia will now carry out trade in rupees and rubles instead of the US dollar.
Bypassing Dollar to Beat Sanctions
The decision to move away from the US dollar was viewed as a way for Russia to avert the impacts of harsh Western sanctions over its invasion of Ukraine. With more than $300 billion of Russia’s foreign currency holds frozen because of approvals, a rupee-ruble exchange game plan would empower Moscow to get to foreign currency and open trade lanes for its significant commodities like oil, gas, metals, and that’s just the beginning.
For India, settling trade with Russia in domestic currencies rather than via dollar transactions through Western financial systems allows New Delhi to boost economic ties with an important partner. India now has greater room to increase key imports like fertilizers, coking coal, rare earth metals, and petroleum products which it relies on Russia for.
Img Credit: – Times Now
Wider De-dollarization Trend
The rupee-rubble bilateral trade deal reflects a gradual global de-dollarization trend emerging among countries seeking to counter reliance on the US dollar as well as escape pressure from American sanctions policies.
In recent years China and Russia have called for reducing dependence on the dollar system, while China-Russia trade is already being conducted through domestic currencies. The India-Russia decision to abandon dollar trade too points to this wider shift unfolding globally.
Conclusion
The $40 billion India-Russia trade deal to utilize rupee and ruble instead of dollar trade signals New Delhi and Moscow’s common desire to boost economic ties and bypass US sanctions pressure. It also highlights the steady de-dollarization push by countries wary of American influence over global trade via dollar dominance. For India and Russia, swapping greenbacks for domestic currencies offers greater independence to pursue growth in bilateral trade.
