Wishful thinking by West, says Moscow dismissing reports of halted India-Russia rupee trade talks

“Wishful thinking by Western news agencies,” said Moscow as it rubbished media reports claiming the suspension of settling India-Russia trade in Indian rupees. Both India and Russia have been in talks for over a year in facilitating trade in INR. However, reports by some western media, on Thursday, suggested that negotiations on settlement of trade using rupee had failed to convince Moscow. “No change in bilateral developments, Wishful thinking by Western news agencies,” news agency ANI quoted a Russian official as saying. Russia was one of the first among the 19 countries who have agreed to facilitate bilateral trade settlement with India using INR. Sanctions were imposed by the US and its allies on Moscow last year after Vladimir Putin announced full scale military operation in Ukraine. Following the sanctions, Russia started trading with other countries in their local currency. Western media reports on Russia-India trade in INR A report by Reuters on Thursday quoted an official from the Indian government saying that due to the high trade gap, “Russia believes it will end up with an annual rupee surplus of over $40 billion if such a mechanism is worked out and feels rupee accumulation is not desirable.” The report quoted another official from the Indian government saying that Russia was not comfortable holding INR and instead wanted to be paid in Chinese yuan of other currencies. “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,” the report quoted a third source directly aware of the developments as saying. De-dollarization There has been a clamouring call by a number of countries to dump dollar as the global reserve currency and instead use local money to settle trade. The decision to ditch dollar gained momentum after sanctions were imposed on Russia. Also, nations believe that transaction and conversion costs would be lower if trade settlement is done using local currency. As per Reuters report, the Indian rupee is not fully convertible and India’s share of global exports of goods is just about 2 per cent. These factors effectively have reduced the necessity for other countries to hold INR. India-Russia trade Until 5 April, India’s imports from Russia have reportedly risen to $51.3 billion from $10.6 billion in the same period last year. There has been a remarkable increase in the imports by India from Russia over the past few months. Discounted oil has constituted a large part of India’s import and has seen a twelve-fold surge during the period. With inputs from agencies Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook,  Twitter and  Instagram.