India and Russia have devised a novel solution to the payment problem they faced after the Western sanctions against the latter following the Ukraine invasion. The workaround is to invest the bulk of Russian earnings from India in setting up industries in India to manufacture products that can be exported to the Russian Federation. India’s imports from Russia increased four times over the last financial year to $46 billion as Russia replaced Iraq as India’s top crude oil supplier last month. India is trying to get Russia to accept payments in rupee. Russia is against it, saying it has no use for such huge sums of Indian currency as its imports from India are only a fraction of what its exports to the country earn. While talks to restart the rupee-rouble trade are ongoing, the two countries have moved quickly to put their new understanding into action. According to sources, Russia intends to spend a large portion of its earnings from India to establish facilities in India that will export hundreds of items manufactured by its wholly owned companies or joint ventures.
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