FROM PAGE B4

Russia is not comfortable holding rupees and wants to be paid in Chinese yuan or other currencies, a second Indian government official involved in the discussions said.

“We don’t want to push rupee settlement any more, that mechanism is just not working. India has tried everything we could to try and make this work but it hasn’t helped,” a third source who is directly aware of the developments said.

Since Russia’s invasion of Ukraine on February 24 last year, India’s imports from Russia have risen to $51.3 billion until April 5, from $10.6 billion in the same period in the previous year, according to another Indian government official.

Discounted oil has constituted a large part of India’s imports, surging twelve-fold in the period. Exports from India in the same period fell slightly to $3.43 billion from $3.61 billion in the previous year, the official said.

Another official said both countries have started looking for alternatives after the rupee settlement mechanism did not work out but did not give details.

The sources said trade with Russia has been continuing despite sanctions and payment issues.

“Right now, we are making some payments in dirham and a few other currencies but the majority is still in dollars. Settlement is happening in different ways, third party countries are also being used,” one of the government officials said.

Indian traders are currently also settling some of the trade payments outside Russia, the officials said.

“Third-parties are being used to settle trade with Russia. There is no ban on transacting with other countries over SWIFT. So, payments are being made to a third country which route it or offset it for their trade with Russia,” the other official said.

On whether money was also being routed via China, the official said: “Yes, including China”.