NEW DELHI: Russia doesn’t have any reserves in the special Vostro accounts, said the additional secretary & director general at the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Trade,
on Monday.
“Under the special vostro account, Russia doesn’t have any reserves but the reserve is only on account of defence procurement and sales,” the official said while refusing to give the details about the quantum of the reserve. Recently, Russian Foreign Minister Sergey Lavron said that Russia has accumulated billions of rupees in Indian banks which it cannot utilize.
On this issue, Sarangi added that the Department of Economic Affairs and the Ministry of Defence are working on a mechanism to deal with that. In July last year, the Reserve Bank of India (RBI) allowed trade settlement in local currency between India and other countries. Under this mechanism, the traders importing from foreign countries can pay in rupee, which would be credited to the special Vostro accounts of the correspondent bank of the partner country.
It was expected that Russia would accept rupee payments for its crude oil supplies to the country. However, Russia has not agreed to take rupee payments for its oil exports to India as it does not know what to do with the rupee balance in the Vostro account.
India’s imports from Russia are more than its exports, especially since last year when India started buying cheap crude from the Eurasian nation. Its imports surged to $51.3 billion until April 5 from $10.6 billion in the corresponding period of last year. Meanwhile, exports from India in the same period fell marginally to $3.43 billion from $3.61 billion in the previous year.
Eighteen countries have opened special rupee Vostro accounts with India for facilitating trade in rupees. In addition, the official also said the commerce ministry is in talks with various ministries and stakeholders to bring out the e-commerce policy with e-commerce rules under the consumer protection act.