INSUBCONTINENT EXCLUSIVE:
Indian businesses are working out alternate payment mechanisms for trade with Russia, including payment in roubles via foreign branches of
Russian banks, to get around the US-imposed sanctions on that country.
This follows a successful pilot under which Russian diamond miner
Alrosa accepted payment in roubles from an Indian diamantaire.
Alrosa is now extending the mechanism to five of its clients who are in the
the government is trying to use other currencies for trading with countries that face US sanctions.
Commerce and industry minister Suresh
Prabhu has already called for a government-level agreement with Russia for diamond imports in a manner that does not adversely impact
Import of rough diamonds declined 6.92 per cent on year to $7.1 billion between April and August this year.
As per Evgeny Agureev, director
of USO Alrosa, the payment through foreign branches of Russian banks can significantly speed up and simplify the payment process, as there
experimented with the alternative payment scheme with its Indian and Chinese clients and would apply it in its business as
necessary.
However, there are some issues switching to non-dollar trade
as customs service is used to proceeds in dollars or yuans.
Around 16 per cent of the company's sales directly go to India but by adding
companies with Indian capital in Belgium and Dubai, the share is 52 per cent, up from 50 per cent last year
So, India accounts for more than half of Alrosa's sales in diamonds.
The company has 65 long term clients for all markets of which 15 are
in India.
"Paying in rubles is part of the larger picture and not because of the US sanctions only
a temporary problem along with rupee depreciation, stricter banking regulations and seasonality of the trade as issues faced by small and
