West notwithstanding, imports from Russia jump 33% to $1.1 bn in March

India's exports to Moscow fall 75% in March over Feb

Shipments from Russia rose nearly 33 per cent to $1.1 billion in March from $831.17 million in the previous month, which was when the country mounted aggression on Ukraine and faced sanctions from Western nations, the data accessed by Business Standard shows.

Growth in imports was largely on account of oil, people aware of the matter said. The Department of Commerce is learnt to have written to the Ministry of Petroleum and Natural Gas (MoPNG), seeking details of imports, including the payment mechanism, which India has not made public.

Even as the increase has been attributed to oil, a product-wise break-up of imports from Russia is not available as of now, and the government is examining it.

According to the official data, during 2021-22 (April-February), crude sunflower oil, fertilisers, non-industrial diamonds, and petroleum products are the top imports from Russia. On the other hand, shipments from India to Russia reduced to a fourth in March against February, the data accessed by Business Standard showed.

Exports witnessed nearly 75 per cent decline to $79 million in March from $325 million in February. Electrical machinery and equipment, iron and steel, pharmaceutical products, marine products, automobile components, and nuclear reactors have been the top items sent to Russia in 2021-22.

Russia’s invasion triggered sanctions from nations such as the US, Canada, and European countries. However, the sanctions imposed collectively by the US and its allies do not cover agriculture, pharma, and energy. India, on the other hand, is prioritising its security and not just economic interests.

Over the past two months, Indian exporters have been facing payment- as well as logistics-related challenges, hurting trade with Russia and other countries of the Commonwealth of Independent States (CIS).

Global shipping lines have not been accepting cargo for Russian seaports or for any other neighbouring countries if the buyer is from Russia, exporters said. Adding to their woes, freight rates have also shot up due to the conflict.

India and Russia are exploring payments through the rupee-ruble mechanism, but modalities are yet to be finalised. Officials said uncertainties on payment realisation and the reluctance of Indian banks to handle consignment documents to Russia are also some of the reasons. Industry officials said exports had been affected more due to the nature of the trade route.

Western nations are uncomfortable about India maintaining a neutral position and not condemning Russia for attacking Ukraine.

India has been cautious and doesn’t want to bypass the sanctions and irk the West, officials said. That is one of the reasons for India not making the payment mechanism public.