Russia and India have established a mechanism for mutual payments in India’s currency, with recent activity showing several rupee-based transactions by Russian companies. This marks the first wave of such dealings since India’s central bank guidance aimed at easing rupee settlements was issued, according to a financial news outlet source.
Foreign trade is increasingly settling in rupees, as a number of deals have been completed recently with Russian participation. The move follows July guidelines designed to simplify cross-border trade using the rupee, signaling a shift in how bilateral commerce can be conducted between the two nations.
Currently, there are at least 18 Vostro accounts in India. These are accounts held by foreign legal entities through local banks and established to support rupee trade not only with Russia, but also with regional partners like Sri Lanka and Mauritius. This development is seen as a potential driver for Indian exports to Russia, which fell in the prior period due to payment delays, and may begin to reverse that trend as settlement times improve and currency conversion frictions lessen.
Recent reports indicate that major Russian banks have opened correspondent accounts with Indian financial institutions, with rupees becoming the primary currency for those arrangements. This aligns with a broader trend toward diversified payment channels and shorter settlement routes that can reduce dependence on traditional swift-based transfers and correspondent networks.
As the rupee settlement framework gains momentum, analysts note that it could contribute to steadier trade flows and create new financing channels for bilateral export and import activity. Stakeholders emphasize the importance of robust regulatory oversight and interoperable banking practices to ensure smooth operation, compliance, and resilience against market volatility. The evolving landscape may also influence pricing dynamics, payment terms, and financing options for businesses engaged in India–Russia trade, potentially reshaping how each side manages risk and liquidity in cross-border transactions. The broader implication is toward a more self-contained, currency-based settlement ecosystem that can support growth and diversification of trade partners in the region, while still adhering to international standards and sanctions regimes where applicable. These developments reflect a strategic alignment between the two economies as they explore alternative payment infrastructures and greater currency autonomy in international commerce. [citation: financial reporting sources and regional market analyses]