New Delhi: India’s trade deficit with Russia has expanded sevenfold due to its rising dependence on crude oil, according to government data.Business Standard reported that India had the maximum trade deficit with China at $71.58 billion, followed by Russia $34.79 billion, from April through January 2022-23 (FY23).Of the $37.27 billion imports from Russia, two-thirds of the value of goods imported from the country was of crude oil, the newspaper said, citing Department of Commerce data.In FY22, Russia was India’s 25th largest trading partner. However, it is now India’s second-largest trade partner.The situation changed dramatically after the US and the European Union slapped sanctions on it, after Russia invaded Ukraine on February 24, 2022.“Russian companies are approaching manufacturers and suppliers to source their needs form India, instead of European and Chinese companies. Over time, the trade deficit will come down. For that, the government will have to issue a mandate that electronic bank realisation certificate (BRC), required to complete export transactions, is issued by Indian banks,” said Arun Gadoria, chairman, Engineering and Export Promotion Council of India.Last year, the Reserve Bank of India came up with a trade settlement mechanism with Russia in rupees.However, exporters told the Hindu BusinessLine that the mechanism is yet to take-off smoothly. This is because many Indian banks were hesitating to issue BRCs to them, due to which they could not claim export incentives and benefits offered by the government.
