Indian Engineering Exports to Russia Witness Significant Growth with the Doubling of Rupee Payments
Published on: February 4, 2024.
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India’s machinery and engineering goods exports to Russia have more than doubled in the last nine months, surpassing $1 billion, according to the Engineering Export Promotion Council of India (EEPC). This surge in exports is attributed to Russia’s decision to trade with various countries, including India, in local currencies instead of the US dollar. Arun Garodia, Chairman of the EEPC, stated that engineering goods exports to Russia are booming since the launch of a payment mechanism to settle trade in national currencies.
Despite strict national guidelines on exports to prevent military use, India and Russia have maintained close trade and defense relations. In late 2022, Russia shared a list of items it wanted to import, such as axles, crankshafts, fasteners, pistons, bumpers, bearings, and welding materials. Garodia estimates that Indian exporters will receive over $1 billion worth of payments in rupees from Russia by the end of the current fiscal year in March.
The latest round of US sanctions against Russia has complicated cross-border settlements with many countries, increasing the risk of secondary sanctions. Nevertheless, India’s engineering exports to Russia, including auto parts, electrical equipment, and machinery, have seen significant growth. In December, these exports recorded an 88% YoY growth, while for the April-December period, they jumped 130% to $1.03 billion. Garodia predicts that these exports will reach $1.5 billion by the end of March.
Indian commerce ministry data shows that India’s total exports to Russia have risen by 46.2% YoY to $2.7 billion in the first eight months of the current fiscal year. Imports from Russia during the same period have also increased by 54.8% to $40.5 billion. Despite the recent Houthi attacks on cargo ships in the Red Sea, which have led to a significant increase in freight costs, efforts are being made to sustain exports to Russia, Europe, and other countries by rerouting ships around the Cape of Good Hope.
Source: [BRecorder.com](https://www.brecorder.com)
