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Over 40 Indian Exporters Get Payments Via Unsanctioned Russian Banks

Payments of 56 major exporters were stuck since Russia invaded Ukraine.

<div class="paragraphs"><p>An aerial view of a cargo ship loaded at a container terminal in a harbour in Hamburg, Germany. (Photo: Reuters/Fabian Bimmer)</p></div>
An aerial view of a cargo ship loaded at a container terminal in a harbour in Hamburg, Germany. (Photo: Reuters/Fabian Bimmer)

After waiting for months due to the war in Ukraine, more than 40 out of 56 major Indian exporters to Russia have received their pending payments, said two government officials with knowledge of the matter.

Around 40-45 Indian exporters have received their dues in full for goods shipped to Russia, said one of the officials on the condition of anonymity as he is not authorised to speak to the press. Payments were routed via unsanctioned banks and the rupee-ruble route is yet to be completely set up, the official said.

Payments of 56 major exporters, approximating to revenue worth $400-500 million, were stuck since Russia invaded Ukraine in February. That's because the U.S. and its European allies imposed sanctions, freezing Russian central bank's reserves and blocked that country's lenders from accessing the SWIFT messaging network for international payments.

The Department of Financial Services is working on clearing the remaining payments, said the second official, who also spoke on the condition of anonymity. The route for further trade revenue is yet to be finalised, he said.

Emailed queries by BQ Prime to the Department of Financial Services and the Ministry of Commerce remained unanswered.

BQ Prime spoke to two Delhi-based exporters who confirmed receiving their pending payments.

"Payments in full have been received after waiting for almost four months. However, there are still pending revenues (for other exporters). Smaller exporters will now have hesitation exporting to Russia again, as there is still uncertainty over receiving future payments," Rakesh Singh, a Delhi-based exporter, told BQ Prime.

As of February, India exported goods worth Rs 235.44 crore to Russia in the last financial year, according to data from the Ministry of Commerce. The shipments mostly included mobile phones, electrical and engineering goods, and pharmaceutical products, among others.

BQ Prime had earlier reported that the Indian government was exploring ways to reach out to smaller Russian banks that have not been sanctioned.

The central government also shortlisted three smaller Indian banks for wiring payments between Russia and India. The names of UCO Bank, Bank of Maharashtra, and the Punjab & Sind Bank were discussed as possible intermediaries by the Reserve Bank of India and the Ministry of Finance.

The government was also considering two Russian banks—the state-run VTB and Sberbank—both of which have branch operations in India, to set up a route that escapes the sanctions imposed.

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