India Shouldn’t Fall For Putin’s Rupees-For-Rubles Deal

India Shouldn’t Fall For Putin’s Rupees-For-Rubles Deal

International and Arab News

India wants to go on trading with Russia for reasons that are more practical than to swipe at the West. For one thing, New Delhi relies heavily on Moscow for defense procurement, a dependency that will be hard to shed overnight with new suppliers. For another, Russia is reportedly offering India a $35 discount per barrel on the pre-war price of flagship Urals grade oil. Cheap energy imports can help Prime Minister Narendra Modi put a lid on rising domestic discontent with high pump prices.

The stance won't exactly please the Americans. However, it's no more opportunistic than Europe continuing to buy Russian gas more than a month into President Vladimir Putin's invasion of Ukraine. India may still end up testing US and European Union tolerance if it agrees to rupee-ruble trade using Russia's communication channel SPFS to move funds. That direct challenge to Washington will not be in New Delhi's own longer-term interests.

SPFS is what Moscow has proposed to the Modi government, according to Bloomberg News, as a way to deliberately short-circuit SWIFT, the messaging system used by banks to move money across borders.

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