‘Russia and India need smooth payment system’

Surat: Indian entrepreneurs conducting business in Russia have appealed to the Indian government to provide additional support to ensure an equitable environment against businesses from other nations. The demands were conveyed to the delegation accompanying Prime Minister Narendra Modi during his visit to Russia on Tuesday.
One of the key demands was related to payment facilitation.Representatives from the diamond industry specifically asked for a direct payment system between India and Russia.
Bharat Narola, a diamond businessman based in Russia who attended PM Modi’s event, also met the Minister of External Affairs, S. Jaishankar. He told TOI over the phone from Moscow, “From India, if someone in the diamond industry wants to make a payment in Russia, then they have to do it through China. If the government develops some alternative, then it will be easy to do business and will also be cost-effective."
The ongoing conflict between Russia and Ukraine has led to sanctions imposed by the US, making payments in US dollars for Russian diamonds challenging. Before this, payments were easily made in US dollars.
It is important to note that Russia’s share in the global rough diamond supply amounted to approximately $4 billion, accounting for around 30% of the global supply. Additionally, Surat polishes 9 out of every 10 diamonds globally, making it the largest importer and a major polishing hub for smaller-sized rough diamonds sourced from Russia. In 2022, following the Russia-Ukraine war, the US Treasury Department imposed restrictions on rough diamonds mined in Russia.
A diamond businessman from the city explained, “Payment in Ruble is smooth from Dubai and Hong Kong compared to doing it from India. Compared to US dollars, the exchange rate is higher for Indian rupees.”
Chandresh Devjani, a textile businessman, echoes the sentiment regarding the need to address payment issues. “Indian rupees are not convertible into Russian currency easily, while payment is smooth in Chinese currency. Further, we request the Indian government to make finance available to expand business ties with Russia,” Devjani told TOI over the phone from Moscow.
Devjani further said, “There is a lot of opportunity for Indian textile businesses in Russia. We are not exploring the opportunities like the Chinese are doing.”