Today’s News
Russia’s largest bank, Sberbank, reports that its business in India is thriving, with trade between the two countries progressing smoothly, despite the Western sanctions impacting other international trade relations.
Image Source: Kyodo News
Anatoly Popov, Deputy CEO of Sberbank, highlighted that the bank facilitates payments for up to 70% of all Russian exports to India. In 2023, trade between Russia and India nearly doubled to USD 65 billion, driven by India’s increasing imports of Russian oil following sanctions imposed by the West in 2022 due to the conflict in Ukraine.
Image Source: Investing.com
“In 2022, there was a significant increase in the interest of Russian businesses in the Indian market because this market serves as an alternative,” Popov stated in an interview before the Eastern Economic Forum, which focuses on Russia’s engagement with Asian countries.
Sberbank’s presence in India includes branches in Delhi and Mumbai, as well as an IT center in Bangalore. This year, the bank has expanded its staff in India by 150%, with plans to hire an additional 300 IT professionals for the Bangalore hub.
Despite being under Western sanctions, which restrict its use of the U.S. dollar, euro, and the SWIFT system for international transfers, Sberbank has faced no issues in India. “Sberbank is a full participant in all Indian payment and interbank systems. There are no restrictions on its operations,” Popov said. India has maintained friendly relations with Russia and has not joined any sanctions against the country, both being members of the BRICS group of emerging economies.
Transactions between Russia and India, conducted in rubles and rupees, are generally processed within a few hours—contrasting sharply with the challenges faced with other trade partners, such as China. Popov mentioned that increased Indian exports to Russia have resolved the previous issue of rupee surplus, which had been an obstacle to bilateral trade in 2023. “The problem has been solved, there is no rupee surplus any longer,” he noted, although balanced trade would require India to boost its exports to Russia tenfold.
Popov emphasized India’s potential, saying, “India is a self-sufficient, vast economy capable of meeting its own needs. Therefore, any goods that Russia previously imported can be purchased in India.”
Sberbank is also broadening its range of hedging tools, including forwards and options, and offering rupee-denominated loans to Russian companies at rates significantly lower than those in Russia. Popov expressed gratitude to Indian regulators for allowing the bank to operate through rupee-denominated “vostro” accounts, which facilitate transactions for foreign banks in India. He added that the current mechanism for converting rubles and rupees is effective, without the need for third-party currencies, but noted that trading in rupees on the stock exchange could enhance transparency.
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