The government on Friday said it is in the process of analysing the impact of sanctions on Moscow for India-Russia bilateral trade and economic cooperation. The US and several Western countries have imposed crippling economic sanctions on Russia for its invasion of Ukraine.
“Many countries have imposed sanctions on Russia due to the conflict. These are expected to have an impact on the global economy, including through disruption of supply chains. Its impact on energy and commodity prices is already visible,” Minister of State for External Affairs Meenakshi Lekhi said. She was replying to a question in Lok Sabha.
“We are in the process of analysing its impact on India-Russia bilateral trade and economic cooperation, in consultation with all stakeholders. India’s relations with Russia stand on their own merit,” Lekhi said. She also referred to discussions on the conflict at the United Nations and said India has called for an immediate cessation of violence and an end to all hostilities.
“We have expressed deep concern at the worsening situation and called for an immediate cessation of violence and end to all hostilities,” she said. Lekhi said India has reiterated that there is no other choice but the path of diplomacy and dialogue to resolve the crisis. “We have emphasised to all member states of the UN that the global order is anchored on international law, UN Charter and respect for territorial integrity and sovereignty of states,” she added.
According to reports, India is getting closer to establishing an alternative payment system to maintain its trade with Russia by identifying a potential bank, as a top panel examining the issue has recommended prioritising edible oil and fertiliser imports as well as payments owed to India.
The top interministerial panel has been tasked with investigating the impact of the West’s economic sanctions against Russia on India’s economy. The sanctions have already had an impact on both developed and emerging economies, depreciating many currencies, including the rupee, driving up oil prices, disrupting supply chains, and raising concerns.
News18 had earlier reported that with the withdrawal of credit guarantee protection on commodities, restrictions on Russian banks and disruptions at Baltic ports amid the Ukraine war, Indian exporters to Russia and the Commonwealth Independent States (CIS) face uncertainty over goods worth $500 million.
India’s annual commerce with Russia, European Union and CIS countries is estimated to be about $90 billion.
As the conflict began, oil prices jumped over $7 in early trade on February 28, while several countries imposed economic sanctions on Russia. The government-owned export credit provider, Export Credit Guarantee Corporation of India (ECGC) revoked coverage for exports to Russia. According to industry data, India exports $2.5 billion worth of commodities to Russia each year, and another $1.5 billion to CIS countries.
In terms of bilateral trade, India imported $6.9 billion from Russia and exported $2.5 billion during the first nine months of FY22.
Fuels, mineral oils, pearls, valuable or semi-precious stones, nuclear reactors, boilers, machinery, and mechanical appliances are the most common imports. Pharmaceuticals, electrical apparatus and equipment, organic chemicals, as well as vehicles are among the commodities it exports to Russia.
With inputs from PTI
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