Informative now: You See, What Price Did The Russian Firms Pay To Purchase Indian Weapons?

Approximately $8 billion was kept in Vostro accounts by Russian exporters as of October.

The money kept in Russian exporters’ Vostro accounts went unused since there were no investment options in India. India-made weapons and defense equipment, together with other imports and Indian securities, have recently cost exporters in Russia, who began trading with India using Indian rupees, close to $4 billion.

This sum is the result of money that was sitting dormant in their Vostro accounts. Approximately $8 billion was kept in Vostro accounts by Russian exporters as of October.

These accounts, which are run by a domestic bank on behalf of a foreign bank, were opened to allow trade between Russia and India using Indian rupees.The money that Russian exporters had in their Vostro accounts went unused, according to a Mint story, because there were no investment options in India.

They only used around half of these funds in just six months, according to the report, which cited two unnamed sources with knowledge of the situation. “It is challenging to say the exact amount in the Vostro accounts since some transactions are very complex,” one of them remarked. But much of the money has been spent over the last six to eight months or so.“It is challenging to say the exact amount in the Vostro accounts since some transactions are very complex,” one of them remarked. But much of the money has been spent over the last six to eight months or so.

In an attempt to encourage bilateral trade in local currencies, the Reserve Bank of India (RBI) allowed 20 domestic banks to open 92 SRVAs of partner banks from 22 different nations back in July 2023. One of them was Russia.As India bought more cheap Russian crude oil after the West placed sanctions on Moscow, a significant number of rupees began to be put into the Russian Vostro account.

For those who don’t know, India receives a significant amount of its crude oil from Russia. Indian government Treasury bills have also been purchased with Russian money (in rupees). Regulations state that these kinds of cash cannot be used to purchase business debt.According to a second source cited in the story, Moscow and New Delhi have been collaborating to find a solution for the problem of the accumulation of rupee payments in the Vostro account.

The individual said, “Russian funds from the Vostro account are also being used to settle Indian exports.” India’s trade ministry recently released figures showing that, in 2023, the country’s exports to Russia came to $4.06 billion, while its imports came to $60.60 billion.