Ukraine Conflict: Russia Requests Clearance of Halted Arms Payments
STORIES, ANALYSES, EXPERT VIEWS
Manu Pubby of Economic Times reports Russia has written to the Defence Ministry, requesting clearance of payments worth $1.3 billion that have been halted since last month.
The Russian Federal Service for Military-Technical Cooperation has sought meetings with senior functionaries to resolve the issue, pointing out that payments for several large defence deals have not been processed.
Officials in India are finding it difficult to process any payment to Russia as most of its banks have been put on the sanctions list, which has resulted in all Indian Banks refusing to conduct transactions for fear of being excluded from the global financial system.
Payments for several ongoing contracts for missile systems, warships and components for aerospace and land systems have been stuck since last month, when financial sanctions were announced against Russian entities.
Officials said the issue has become complex after the two Russian banks (VTB and Sberbank) undertaking transactions for defence contracts came under sanctions. In the case of Sberbank, which processed billions of dollars worth of arms deal money annually, the US treasury has even sanctioned its chief executive Herman Gref.
Indian, Russian bank officials meet on framework for trade, banking: Meanwhile, Russian central bank officials are expected to meet their counterparts from the Reserve Bank of India (RBI) to create a regulatory framework that will help sustain bilateral trade and banking operations despite the global sanctions against Moscow, according to officials. They are also likely to work on the creation of a dedicated payment mechanism to facilitate India's energy purchases from Russia.
The commerce and external affairs ministries are understood to be preparing broad contours of the proposed Indo-Russian collaboration in the context of Western sanctions against Russian banks.
"The government has given an in-principle green signal for the INR-rouble trade, and it now needs to be brought under a regulatory framework. This meeting will be first in that direction," said an official.
Indian businesses that trade with Russia have suggested reactivation of the rupee-rouble trade mechanism to ensure that supplies are not hit by Western countries' move to block Russian banks from the SWIFT payments network.
