Russia's rupee problem

When efforts are being made to float a Brics currency, is the idea of internationalising rupee premature?

- RAKESH JOSHI

The Union commerce ministry has been grappling with some mindblowing statistics and unusual developments, of late. No, it is not just the rise in imports from China and the drop in exports to that country that has led to a trade deficit of almost $79 billion in 2022-23. India's annual trade with Russia had more than tripled to $44.4 billion in the fiscal year to 31 March 2023, from $13.1 billion the year before. Discounted oil made up a significant portion of India's imports, which reached a record 1.68 million barrels a day in April - up six-fold from a year earlier. Russia also overtook Iraq for the first time as the top oil supplier to India in 2022-23.

In normal circumstances, the dramatic jump in bilateral trade would have been hailed by both Prime Minister Narendra Modi and President of Russia Vladmir Putin as a landmark in the evolution of bilateral ties. However, given the present circumstances, both leaders chose to remain silent. Both leaders had set a target of $30 billion by 2026 at their summit in 2021, a few months before Russia's invasion of Ukraine. In their meeting, they placed a strong emphasis on new drivers of growth for long-term co-operation, as well as on the proposed Trade Agreement between India and the Eurasian Economic Union.

Jump in trade