Payment link between Russia and India raises alarm in US and Australia

“One of the things we need to do as democracies is make sure we work together to maintain the rules-based approach we’ve had since World War II.”

“We will continue to work with India, both within the Quad and bilaterally, to ensure we are doing everything we can to ensure the rules-based approach continues,” he said.

Commerce Secretary Dan Tehan and Prime Minister Scott MorrisonCredit:Alex Ellinghausen

India is eager to continue bilateral trade with Putin due to its reliance on Russian weapons and the prospect of buying cheaper oil as world prices rise. During the Cold War, the Asian nation was part of the Non-Aligned Movement that refused to side with the West or the Communist East.

The plan currently under discussion includes payments in rupee rubles with SPFS, according to sources who asked not to be identified while discussing confidential deliberations.

Under the proposal, initially reported by Bloombergrubles would be deposited in an Indian bank and converted to rupees, and the same system will work in reverse.

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Undecided elements include whether the exchange rate will be fixed or variable.

But the issue is controversial as India’s neutral stance on Russia’s invasion of Ukraine already contrasts with the other members of the Quad alliance who have made a diplomatic effort to convince Modi to take a harder line in the war.

Australian Prime Minister Scott Morrison announced a series of trade deals with India two weeks ago after an online meeting with Modi in which Morrison used his opening remarks to discuss the implications and consequences of the Russian invasion “for our own region in the Indo-Pacific and the coercion and problems with which we are confronted here”.

Prime Minister Narendra Modi’s government, on the other hand, has resisted pressure from Western countries, including Australia, arguing that arms purchases from Russia are necessary to counter China’s growing military assertiveness.

Morrison’s administration is also preparing for further sanctions, with Tehan and Raimondo discussing the issue in Washington today, as part of wider trade talks with business leaders from both countries.

British Foreign Secretary Liz Truss.

British Foreign Secretary Liz Truss.Credit:AP

“We have put in place very specific sanctions against individuals, against companies, but one of the things we are also looking at is removing MFN (Most Favored Nation clause) and also introducing potentially new tariffs that would be very difficult for any trade between Australia and Russia.”

Australia is also on the cusp of finalizing a free trade deal with India, with an announcement possible in days as the government tries to close a deal less than two months before the expected elections in May.

British Foreign Secretary Liz Truss is expected to visit India on Thursday as part of a “wider diplomatic push” on the war in Ukraine, her office said, a trip that will coincide with her Russian counterpart Sergei Lavrov coming to the country. travels.

India’s foreign ministry said Lavrov would also visit India on Thursday, adding that Indian officials would hold preliminary talks with diplomats from the United States and Britain.

Despite being ravaged by sanctions, Russia has shown resilience and a willingness to back off against a Western-led financial order.

The Wall Street Journal reported that Russia’s domestic payment system continues to function smoothly even after Visa and Mastercard withdrew from the country earlier this month.

Credit card users in Russia had been pushed from the Visa and Mastercard network to a domestic named Mir after a series of sanctions against Moscow for annexing Ukraine’s territory of Crimea in 2014.

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