With the Russian rouble plunging against the dollar, Indian exporters have moved the union commerce ministry to work out a rupee payment mechanism in trade with the Russian Federation.
The rouble's rollercoaster ride this past week has put Indian exporters in a fix, with huge currency risks, forcing them to knock at the ministry's doors demanding a rupee payment mechanism for trade with Russia on the lines of the one devised for Iran earlier.
Moscow and Tehran have already in principle agreed to use national currencies in mutual food trade.
"The sides have agreed onů the expediency of a transition to payments in national currencies," the statement issued after a meeting between Russia's state agricultural watchdog Rosselkhoznadzor and Iran's deputy agriculture minister Hassan Sinaki, said.
Currently, India's merchandise exports to Russia are invoiced in US dollars. But, with the rouble losing half its value against the dollar since June, the rouble cannot be linked to dollar anymore.
The Federation of Indian Exporters Organisation (FIEO) will soon approach the commerce ministry with this demand.
Under a rupee payment model, banks in the two countries would aggregate claims against each other under a centrally organised arrangement and settle these at pre-determined rates periodically, in rupees.
With the balance of trade in favour of Russia, it is felt that exporters/importers or banks from Russia be allowed to open and maintain non-interest bearing rupee accounts with banks in India.
Indo-Russian trade stood at $6.01 billion in 2013-14, with the trade balance in favour of Russia. India's exports to Russia in 2013-14 stood at $2.121 billion, down 7.6 per cent from the previous year.
Indian exports mainly comprise pharma products, electric machinery and equipment, iron and steel, coffee, tea and spices.
India also started exporting agricultural commodities such as gherkins and grapes.
Indian imports from Russia stood at $3.89 billion in 2013-14, down eight per cent from the previous year.
Meanwhile, China's trade minister too has proposed more use of China's currency in settling trade with Russia in the face of a falling rouble to ensure safe and reliable trade, Hong Kong broadcaster Phoenix TV reported on Saturday.
Chinese minister of commerce Gao Hucheng said the use of China's yuan, or renminbi, has been increasing for several years but western sanctions on Russia had made the trend more prominent, Phoenix TV said on its website news.ifeng.com.
Gao said China and Russia were capable of achieving this year's trade target of $100 billion. Last year, trade between the two gained 1.1 percent at $89.2 billion, according to Chinese customs figures.