On August 14 local time, according to The Times of India, the Indian Ministry of Foreign Affairs announced that Indian Foreign Minister S. Jaishankar will visit Moscow from August 20 to 21 to attend the 26th India-Russia Intergovernmental Commission and meet with Russian Foreign Minister Lavrov, discussing bilateral trade relations, with a focus on the impact of recent high tariffs imposed by the United States on India.
According to Bloomberg on August 14, one of the key topics of this visit is the establishment of a trade mechanism priced in Indian rupees, aiming to reduce reliance on the US dollar and improve the efficiency of trade settlements. In actual settlements, the Indian rupee will be exchanged for Russian rubles through bank accounts to pay Russia. Additionally, India plans to discuss free trade agreement (FTA) matters with members of the Eurasian Economic Union (EAEU) during the visit.
In November 2022, Jaishankar met with Lavrov in Moscow, Bloomberg
On August 6 local time, the US government signed an executive order imposing additional punitive tariffs of 25% on India, combined with the already implemented 25% "reciprocal tax" starting on August 7, the total tariff on Indian exports to the US quickly doubled to 50%.
On the day the presidential order was signed, Trump criticized India for purchasing Russian oil on social media and called the BRICS group "anti-American." In response, India stated that "de-dollarization" is not the focus of the BRICS agenda, and the real focus is improving cross-border payment efficiency.
This tariff penalty measure will take effect on August 27. The Indian Ministry of Foreign Affairs strongly responded, calling the move "unfair, unreasonable, and unjust," and strongly stated that it will take "all necessary measures to protect national interests."
Perhaps due to the imminent pressure, according to a report by the Economic Times of India on August 13, the Reserve Bank of India (RBI) is indeed considering introducing a new measure aimed at accelerating the trade settlement process between India and Russia. The measure suggests opening "vostro accounts" at Indian banks, depositing Indian rupees into the account, and then converting them into Russian rubles and depositing them into Russian banks, thereby bypassing the US dollar settlement system.
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