Russia's military Telegram page said on October 28 that it is likely that Russia and India have found some formulas to adjust the trade balance between the two countries. India builds ships for Russia instead of paying for oil.
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| Russian President Putin and Indian Prime Minister Narendra Modi at the G20 held in India. (Source: Politico) |
Currently, the Indian Rupee is not a strong currency and the amount of Rupees earned from Russian oil sales stuck in India is quite high.
To address this situation, Indian shipyards are expected to build bulk carriers and chemical tankers for Russia until 2027. It is known that the cost of building ships in India is on average half cheaper than in Russia. Russia has assured that its shipyards will not suffer losses as they will continue to operate at full capacity thanks to defense and civilian orders.
The switch to Chinese yuan has been discussed with India before but the Indian side is still considering the possibility. New Delhi and Beijing are not on the best of terms despite both being BRICS members.
Russia is selling hundreds of millions of barrels of crude oil to India – but instead of the US dollars and euros the Kremlin needs to finance its budget, it is earning mountains of rupees that make spending difficult.
According to statistics collected by analytics firm Kpler, by the end of 2022, India had purchased more than half a billion barrels of crude oil, up nearly tenfold from 2021, a year before the conflict in Ukraine broke out. As a result, about 1 billion rupees a month flowed into Moscow's coffers.
At the G20 in New Delhi, Russian Foreign Minister Sergey Lavrov acknowledged Moscow’s dilemma. “We have accumulated billions of rupees that we have not yet figured out how to use,” he said at a press conference after the G20 summit in New Delhi.
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