That India is a favoured trading partner, with potential for a large market, has been quite evident, at least since March 2018 when 23 advanced and developing countries agreed to have currency swap arrangements with India, extending credits in settling transactions.
Use of rupee for international payments
There has been an unexpected turn in the use of the Indian rupee for international transactions after the Ukraine-Russia war began in early 2022, in turn leading to sanctions imposed by the United States and the European Union on Russia, by directly targeting the assets of Russian financial institutions. The issue became serious for Russia (one of the largest suppliers of India’s 212.2 million tons of crude oil imports during 2022) and for India (a large market for Russian exports). An alternative route was chosen to settle payments between India and Russia by using the Indian rupee in transactions related to trade between the two countries.
