Indian textiles and apparel export to Russia is likely to see a multi-fold rise once both the countries set a mechanism to accept payments in local currency, media reported.
According to the media report, the Reserve Bank of India is working on building a reference exchange rate framework between the rupee and rouble.
Once the framework is established, RBI and the Central Bank of Russia will announce customized common reference exchange rates on daily basis, on which importers and exporters can negotiate the pricing of the products and payment transactions.
This will promote bilateral trade in local currencies bypassing the US dollar and Russian banks will open accounts in Indian banks to deposit the rouble while Indian banks will have to open accounts in Russia to deposit the rupee, the report said.
Traditionally, India is exporter of textiles and apparel to Russia.
However, India’s apparel export to Russia was mere 0.46% of India’s total apparel export of $14.472 billion during last year compared to 30.44% to the US and 13.27% to the UAE.
On the other hand, Russia is more dependent on China and Bangladesh for apparel imports.
It imported 32.60% and 14.62% of apparel respectively from these two countries out of a total import of $7.952 billion in 2021.