Indian exporters fear $400 mn stuck in Russia due to SWIFT ban
Published On: Wednesday, March 2, 2022 | By: Team KnowMyStock
With western nations blocking many Russian banks from accessing the SWIFT international payment banking system, following Russia’s invasion of Ukraine, roughly $400 million of Indian exporters may get stuck indefinitely. While exporters will get more clarity on the impact when the finer details of the SWIFT ban are spelled out, they have had discussions with the government to deal with payment-related challenges. One of the options could be to restore the rupee-rouble payment mechanism with Russia, an industry official said, adding that the department of commerce is looking into the concerns of the exporters and is likely to come up with some measures soon. Exporters are also hoping for a wind-down period will be available in the sanctions, which will take care of trade transactions in the pipeline.
The world’s largest container lines such as Maersk, MSC have already temporarily suspended cargo shipments to and from Russia. As a result, goods are not moving and freight rates have further shot up.
Russia is India’s 25th largest trading partner as of 2021-22, with the size of the total trade at $9.4 billion during the first three quarters of the current fiscal. Its share of exports compared to India’s total exports at less than one percent. Imports from Russia have a share of 1.27 percent. The trade balance has been in favour of Russia, at least for a decade.
Electrical machinery and equipment, nuclear reactors, pharmaceutical products, iron and steel, organic and inorganic chemicals are the top items exported to Russia. In the case of imports, key items include mineral oils, vegetable fat, fertilisers, and rubbers.
We are on Telegram!
JOIN our telegram channel to receive updates on Financial News and Stock and FNO Tips.
Click Here!
Follow Us On:
