First national currenices contracts between Russia and India may be signed as early as in 2016

First contracts between Russia and India in national currenices - rubles and rupees respectively - will be signed as early as in 2016. This was the opinion expressed by Russian Deputy Finance Minister Sergei Storchak in an interview to TASS.

First contracts between Russia and India in national currenices - rubles and rupees respectively - will be signed as early as in 2016. This was the opinion expressed by Russian Deputy Finance Minister Sergei Storchak in an interview to TASS.

«We will witness the transition into national currencies under particular contracts as early as next year, - he said. - As for large-scale transition, at least bilateral trade volume should increase first. The more transactions will be, the more national currencies will be used».

According to him, in order to launch this transition process, «the exporters and importers themselves should feel the benefits of using national currencies». «This can not be reached by administrative decisions, - Storchak explained. - The authorities should merely create favorable conditions, and I believe that the Russian side did do it. There are no techical obstacles to the use of the ruble.»

In early December 2014, the first meeting of Russian-Indian working group on transition to national currencies in mutual trade settlements took place. In the near future the working group will prepare recommendations on how to remove the existing barriers and encourage such operations, which will then have to be passed to the authorities of both countries. This was one of the key issues of the joint statement of Indian Prime Minister Narendra Modi and Russian President Vladimir Putin at the end of his visit to New Delhi on 11 December. «The parties shall encourage the use of national currencies in mutual settlements in bilateral trade,» - the leaders said.

In January, the Federation of Indian Export Organizations (FIEO) also introduced a plan providing for a shift in mutual payments with Russia from dollars to rupees, to the Ministry of Industry and Trade of India.

The exporters want the Indian government to develop a mechanism similar to the one that already exists between India and Iran. Earlier, the Central Bank of Iran opened an account in the Indian UCO Bank, where the payment for the oil imported from the Arab Republic is being transferred. Part of this payment is counted toward the deliveries of Indian goods to Iran.

Sergei Storchak is currently in India with a delegation of the State Duma Speaker Sergey Naryshkin, who is in New Delhi on an official visit.

First published in Russian by TASS.

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