• Source:JND
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India-Russia financial ties: As US-India trade tensions intensify under President Donald Trump’s tariff push, India is moving to deepen financial cooperation with Russia. New Delhi and Moscow are actively working on a simplified payment system aimed at easing transactions for students, tourists, and businesses, officials confirmed on Saturday. The development comes at a time when India is expanding exports of cars, electronics, and IT goods to Russia while suspending parcel services to the United States in response to Washington’s tightening of customs rules. The move highlights a shifting trade strategy, with India increasingly looking toward Moscow as a reliable partner amid mounting friction with Washington.

Ambassador Confirms Talks on Payment Mechanisms

India’s Ambassador to Russia, Vinay Kumar, confirmed that both governments are discussing new arrangements to facilitate financial transactions. "The Indo-Russian working group on Banking and Finance, comprising representatives from relevant ministries and the central banks of both nations, is actively engaged in discussions concerning technical aspects of messaging systems and payment mechanisms to make transactions easier for all categories of travelers,” Kumar said in an interview with Russian news agency TASS. The ambassador stressed that the focus of the talks is to reduce payment bottlenecks for tourists, students, and professionals, many of whom face hurdles when transferring money or making routine payments in either country.

Kumar added that Russian banks, including VTB and Sberbank, are already present in India and providing services to visiting Russian nationals. “There are several banks that have branches in India and are currently making transactions easier for a variety of travelers, including students and tourists from Russia,” he noted. The new system under discussion is expected to build on these existing services and provide a more seamless experience, reducing dependency on cash and facilitating cross-border transfers in local currencies.

Oil Trade Settlement Faces No Hurdles

While the new initiative focuses on payments for travel and education, India's energy trade with Russia continues without issues despite international pressure. “India and Russia have a working system of trade settlement in national currencies. There is no problem now in payment for oil imports,” Kumar clarified.

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Speaking to Russian news agency TASS on Sunday, India’s Ambassador to Russia, Vinay Kumar, dismissed the US move as “unfair, unreasonable, and unjustified.” He asserted that India’s energy strategy prioritises the needs of its 1.4 billion citizens, and that cooperation with countries like Russia has not only ensured domestic energy security but also contributed to global oil market stability. “First of all, we have clearly stated that our objective is the energy security of 1.4 billion people,” Kumar said. “India’s cooperation with Russia, as with several other countries, has helped to bring stability to the global oil market. The US decision is unfair… the government will continue taking measures to protect national interests.” While defending India’s policy, Kumar pointed out the double standards at play. “Not just India, the US and Europe also trade with Russia,” he noted, highlighting that energy transactions are driven by market dynamics.

The payment talks with Moscow also coincide with growing strains in India-US trade relations. President Trump has announced additional tariffs on Indian imports, raising duties by 25 per cent, later doubling them to 50 per cent. The White House justified the move by citing New Delhi’s continued oil purchases from Moscow, despite Western attempts to isolate Russia economically following its war in Ukraine.

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Strengthening Rupee-Ruble Framework

A simplified payment deal between India and Russia would strengthen the rupee-ruble framework, which already facilitates oil trade and defense-related transactions. Expanding into education, tourism, and consumer goods could help against Western financial restrictions and lessen reliance on the US dollar. India’s shift toward Moscow shows a bigger strategic change. While New Delhi is still working with Washington, Trump's tough trade policies and constant alerts about Russian oil imports have pushed India to find other economic partners.