New Delhi, October 26
External Affairs Minister S Jaishankar’s reported plans to visit Moscow in November would come at a critical time in India’s ties with Russia. The prolonged Ukraine conflict leading to high energy and food prices and the screws being tightened by the western countries on trade with Russia are the key concerns.
The current India-Russia trade story is buoyant. In the first five months of the current fiscal, trade with Russia was at a record $18 billion. This has given rise to expectations that the Putin-Modi target of $40 billion trade by 2025 would be accomplished within this fiscal itself.
But there are storm clouds. The Union Finance Ministry will have to make a large provision in the supplementary demands for grants to cover up for the rise in fertiliser prices. The biggest worry is on the energy front because of the West’s plans to begin price capping on Russian oil from December 5. On surface it will suit India to buy Russian oil under western supervision at say $60 a barrel.
But that would mean siding with G7 and opposing Russia, that India has avoided so far.
Another worry is the inability of the rupee-rouble trade to take off. Large Indian banks are understood to have not responded warmly to the proposal from Russians to set up rupee trade settlements for fear of western curbs and also because of difficulties in determining an accurate rouble-rupee exchange rate.
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