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Forget dollar, India, Russia must create digital rupee or ruble to boost trade relations: Top Moscow official

The top Russian official stressed that both nations should work to obtain a new medium for payment and added digital payment could be the "most promising" and "most viable" option for both nations.

Ajeet Kumar Reported By: Ajeet Kumar @Ajeet1994 New Delhi Updated on: March 30, 2023 19:36 IST
St. Petersburg International Economic Forum event in New
Image Source : INDIA TV St. Petersburg International Economic Forum event in New Delhi.

Russia-India Business Forum: Amid the ongoing Russia-Ukraine war, the former has emphasised the "event" as an opportunity for Moscow to explore more Indian markets and vice-versa with an aim of promoting a "common currency". According to a top Russian official, this will boost trade relations between the two "friendly nations".

Speaking at the two-day St. Petersburg International Economic Forum event in New Delhi, Deputy Chairman of the State Duma Alexander Babakov, on Thursday, stressed that both India and Russia should form a financial relationship with a new common currency-- a move that New Delhi reiterated on multiple events.

Babakov stressed that both nations should work to obtain a new medium for payment and added digital payment could be the "most promising" and "most viable" option for both nations. "New Delhi, Moscow should institute a new economic association with a new shared currency, which could be a digital ruble or the Indian rupee," said Babakov.

Role of China in developing a common payment platform

However, the top Russian official also stressed that China could also play a crucial role in developing a common currency for the trio-- India, Russia and Beijing.  "New Delhi, Beijing and Moscow are the nations that now institute a multipolar world that is endorsed by the majority of governments. Its composition should be based on inducting new monetary ties established on a strategy that does not defend the US's dollar or euro, but rather forms a new currency competent of benefiting our shared objectives," he noted.

Western sanctions on the ruble turned out a major victory for Russia 

It is worth mentioning ever since Moscow started what it termed a "special military operation" against its neighbouring nation, the West has imposed unprecedented levels of sanctions against the Russian economy. Initially, the "ruble" turned out to "rubble", but Russian President Vladimir Putin's robust economic strategy nursed the currency to bounce back from the fall it took after the US and European allies moved to bury the Russian economy under thousands of new sanctions. 

Furthermore, expressing satisfaction with the Russian economic situation, Babakov lambasted US President Joe Biden and the European Union and asserted both dollar and euro are serving the interests of Washington and London, not the whole country.  According to him, these methods of payment do not consider Russia, India, or China as equivalent counterparts.

Role of digital rupee in trade 

"Our goal should be focused on writing new rules in the financial sphere in order to enable the use of an already common currency," he stressed.

"It doesn't matter whether it's a digital ruble, a digital rupee, a digital yuan, or some other currency. But this currency must follow the laws of our respective nations," added the top Russian official. 

Interestingly, circumventing Western pressure, a Russian-Indian business forum was organised in the national capital on March 29-30 as part of the St. Petersburg International Economic Forum's international events. According to the statement, the meeting in New Delhi aimed at improving Indian-Russian business relations and facilitating Russian companies entering the Indian market.

What does it mean for India?

Surprisingly, the statement from the Russian official came a day after sanctions hit Moscow signed an agreement with an Indian oil giant intending to boost the crude oil supply. According to the Indian Ministry of Petroleum, Moscow's top oil company Rosneft signed a deal with the Indian Oil Company to increase the supply of crude oil to New Delhi.

"During the trip, Rosneft Oil Company and Indian Oil Company signed a term agreement to substantially increase oil supplies as well as diversify the grades to India. Igor Sechin, CEO of Rosneft Oil Company, and Shrikant Madhav Vaidya, Chairman of Indian Oil Corporation Ltd., signed the agreement, in the presence of India's Minister of Petroleum and Natural Gas Hardeep S. Puri," the company said.

Notably, if Russia agrees to trade in Indian currency, it would be a major boost to the Indian foreign forex reserves, which is eventually an all-time high.  

Russia's oil export soars nearly 22-fold 

Earlier on Tuesday, Moscow claimed it supplied crude oil to India nearly 22-fold ever since the West imposed sanctions. According to multiple state news agencies, the Russian Deputy Prime Minister said that the maximum energy was diverted to "friendly nations" after the United States and the European Union imposed back-to-back sanctions on Russian energy. 

"Most of our energy resources were diverted to friendly countries," several state news agencies quoted Alexander Novak as saying. "For example, Russian oil sales to India surged at least 22 times," he added. 

Also Read: Indian, Russian oil giants strike deal to boost oil supply despite Western pressure

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