India Russian firms buy $4 billion worth of India-made arms, pay in Indian rupee

Nilgiri

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Exporters in Russia, who started trading with India using Indian rupees, have recently spent nearly $4 billion to buy India-made defence equipment and armaments, among other imports and Indian securities. This amount come from funds which were lying idle in their Vostro accounts.

Till October, Russian exporters held about $8 billion in Vostro accounts. These accounts were set up to facilitate trade between Russia and India, using Indian rupees and are managed by a domestic bank on behalf of a foreign bank.

As per a report by the Mint, due to a lack of investment opportunities in India, the money held in the Vostro accounts of Russian exporters remained unspent.


In a mere six months, they used only about 50 per cent of these funds, the report quoted two people aware of the matter, who declined to be identified.

One of them said, “It is difficult to say the exact amount in the Vostro accounts since some transactions are very complex. However, during the last 6-8 months or so, a large part of the amount has been used.”

Back in July 2023, the Reserve Bank of India (RBI) permitted 20 banks operating in the country to open 92 SRVAs of partner banks from 22 countries as part of efforts to promote bilateral trade in local currencies. Russia was one of them.

(More at link)
 

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Exporters in Russia, who started trading with India using Indian rupees, have recently spent nearly $4 billion to buy India-made defence equipment and armaments, among other imports and Indian securities. This amount come from funds which were lying idle in their Vostro accounts.

Till October, Russian exporters held about $8 billion in Vostro accounts. These accounts were set up to facilitate trade between Russia and India, using Indian rupees and are managed by a domestic bank on behalf of a foreign bank.

As per a report by the Mint, due to a lack of investment opportunities in India, the money held in the Vostro accounts of Russian exporters remained unspent.


In a mere six months, they used only about 50 per cent of these funds, the report quoted two people aware of the matter, who declined to be identified.

One of them said, “It is difficult to say the exact amount in the Vostro accounts since some transactions are very complex. However, during the last 6-8 months or so, a large part of the amount has been used.”

Back in July 2023, the Reserve Bank of India (RBI) permitted 20 banks operating in the country to open 92 SRVAs of partner banks from 22 countries as part of efforts to promote bilateral trade in local currencies. Russia was one of them.

(More at link)
What did Russia buy exactly,any info?
 

Nilgiri

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What did Russia buy exactly,any info?

Honestly its just one news source reporting this right now, so we will have to wait for more details/follow up.

It could very well be a fluff piece too....or investments instead of outright buying (by Russia buying stakes into Indian companies/bond market etc that may or may not be related to defence sector)

If it is true and I had to guess though, it could be ammo at best since thats really only thing India has surplus production and stores to some degree. All big ticket kind of stuff, it doesn't make sense as India is deficit in all of those still mostly (the kind of things Russia wants these days anyway).
 

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Honestly its just one news source reporting this right now, so we will have to wait for more details/follow up.

It could very well be a fluff piece too....or investments instead of outright buying (by Russia buying stakes into Indian companies/bond market etc that may or may not be related to defence sector)

If it is true and I had to guess though, it could be ammo at best since thats really only thing India has surplus production and stores to some degree. All big ticket kind of stuff, it doesn't make sense as India is deficit in all of those still mostly (the kind of things Russia wants these days anyway).

It seems the total amount of Rupee-equivalent currency offloaded from vostro accounts by buying engineering goods was $4 bn. Nothing to indicate it was all 'arms'.

Seems like a sensationalist title.

Could also be industrial equipment that is often classified as dual-use i.e. explosives for mining operations.

Though it is true that certain Indian companies were supplying electronics that have strategic applications to Russia (which they were putting on their missiles), and got sanctioned for it, like Si2 Microsystems:


...seems like a pretty shady company tbh.
 

Nilgiri

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It seems the total amount of Rupee-equivalent currency offloaded from vostro accounts by buying engineering goods was $4 bn. Nothing to indicate it was all 'arms'.

Seems like a sensationalist title.

Could also be industrial equipment that is often classified as dual-use i.e. explosives for mining operations.

Though it is true that certain Indian companies were supplying electronics that have strategic applications to Russia (which they were putting on their missiles), and got sanctioned for it, like Si2 Microsystems:


...seems like a pretty shady company tbh.

Yah them adding "among other imports and Indian securities.".... already kind of tipped me off as to the clickbait likelihood of the title.

Maybe some higher up journo/editor jumped gun conveniently on tieing "securities" to defence, arms etc :LOL:

I mean there is things vostro rupee likely now become much more competitive on compared to where ruble or forex has to be spent instead..... i.e buy indian pharma, foodstuffs like tea, certain inputs, chemicals.... either direct or through UAE as entrepot, since UAE and India have strong financial integration increasingly.
 

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