English
New Delhi: The Russia Ukraine war has shaken the world economy. From oil prices to food prices, everything seems to have been impacted. Amidst this, according to a report by Times of India, Indian exporters have payments between $400-500 million stuck in Russia. These are the pending payments for the goods already supplied.
The dilemma has been accentuated after the West imposed sanctions on Russia, including removing some Russian banks from the SWIFT messaging system. The exporters, according to the report, are constantly talking with the government to deal with the crisis and find a middle path.
According to TOI, the pharma and the farm sectors have been kept out of the ban on the SWIFT mechanism. The trade of these goods can still be done via the mechanism. However, other sectors are concerned about the ban. After the ban, real-time data on the transfer of money cannot be received from these banks. Due to this, they will have to communicate via fax or telephone, delaying the process further.
According to the report, various shipping companies have suspended the delivery of goods to and from Russia. Therefore, it is unclear how the trade will happen in near future. Since the inception of the Russian attack, companies like Maersk stopped taking further orders.
However, the pending payments are a bigger cause of worry. The government has held a number of talks with the traders and tweaked certain norms. However, reports suggest that further relaxations are imperative.
According to PTI, exporting community has expressed that if sanctions, including the one on the banking network, continue, the central government may open a rupee payment channel as done in the case of Iran in the past. Export Credit Guarantee Corporation has also decided to withdraw coverage for shipments to Russia with effect from February 25, which is a huge setback for exporters.
India is one of the biggest suppliers of merchandise to Russia. The exclusion of Russian banks from SWIFT will impact the trade directly. However, some experts have suggested that payment be received via a third country. But this would also require some existing rules to be tweaked by the government.
For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on India.com.
