Written by Elena Fabrichnaya and Gleb Bryansky
MOSCOW (Reuters) – Trade between Russia and India is booming and bilateral payments are running smoothly without the problems that have hampered trade with other countries, Anatoly Popov, deputy chief executive of Russia’s largest lender Sberbank, told Reuters.
Sberbank handles up to 70% of Russia’s total exports to India. Russia’s trade with India nearly doubled to $65 billion in 2023, as the country became a major importer of Russian oil after Western sanctions imposed in 2022 over the conflict in Ukraine.
“In 2022, there has been a significant increase in the interest of Russian companies in the Indian market because this market is an alternative,” Popov told Reuters in an interview ahead of the Eastern Economic Forum, an economic conference targeting Russia’s Asian partners.
Sberbank’s Indian branch has offices in Delhi and Mumbai, as well as an IT centre in Bangalore. It has increased staffing at its Indian offices by 150% this year, after announcing in April that it wanted to hire 300 IT staff for the centre in Bangalore.
Sberbank is under Western sanctions and therefore cannot conduct transactions in US dollars and euros or use the SWIFT system for international transfers. However, Popov said the bank had not faced any problems in India.
“Sberbank is a full participant in all Indian payment and banking systems. There are no restrictions on its operations,” Popov said. India has not joined any anti-Russian sanctions and maintains friendly relations with Russia, a member of the BRICS emerging economies group.
Sberbank said that transactions in rubles and rupees were running smoothly, with 90% of them taking just a few hours to complete. This is in stark contrast to other trading partners such as China.
Popov stressed that the growth in Indian exports to Russia helped solve the problem of the surplus of rupees among Russian companies, which hampered bilateral trade in 2023, as the rupee was used to pay for imports from India.
“The problem has been solved, there is no longer a rupee surplus,” Popov said, adding that to achieve trade balance, India would need to increase exports to Russia tenfold. An Indian source told Reuters on August 14 that the rupee surplus had fallen to “a few million dollars.”
India, the world’s fifth-largest economy, has almost everything Russian importers are looking for, he said.
“India has a self-sufficient and large-scale economy that is able to meet its needs. Therefore, any goods that Russia used to import can be purchased in India,” Popov said.
Sberbank is also developing its offering of hedging tools, which already include futures and options, as well as other products such as rupee-denominated loans to Russian companies at rates much lower than those in Russia.
He thanked Indian regulators for giving him the opportunity to operate through rupee-denominated “vostro” accounts, which local banks can hold on behalf of foreign banks in India, facilitating their operations.
Popov said that the current mechanism for converting the ruble and rupee works well and does not require any external currencies for settlement. However, he stressed that trading the rupee on the stock exchange would increase transparency.