Rysk ekonomisk politik: Varför går det så bra?

Indian businesses take UAE route for Russian payments

Last Updated: May 13, 2022

Some Indian businesses and banks are using an old trade playbook they had relied upon during the US embargo on Iran to sidestep the sanctions on Russia. With New Delhi and Moscow yet to cobble together a kosher mechanism for rupee-rouble trade, exporters and importers are turning to UAE, which offers a flourishing transhipment point and a money market where multiple currencies are freely converted.

Cargo movements and associated trade payments are being routed through outfits and banks in Dubai in transactions that come across like regular bilateral trade between India and UAE, two senior bankers and a few members of trade bodies told ET. Neither the banks handling the payments question the origin or final destination of the goods nor their clients talk about them.

Biden’s sanctions against Russia are a double-edged sword

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But the unprecedented nature of these measures is producing concerns around the world that the United States has “weaponized” its financial power and could lead, over time, to the decline of the dollar’s dominance, which is what gives America its financial superpowers in the first place.

I’ve been hearing about this firsthand from three sources I trust. The first, in New Delhi, recently told me about a conversation that took place at the highest levels of India’s government. The topic: how to make sure that the United States could never do to India what it has just done to Russia. The second, from Brussels, where staff at the European Commission has been tasked — even while working with Washington on the sanctions — with finding ways to reduce the role of the dollar in its energy imports. The third, an Asian observer of China, speculated that the overly severe lockdowns in Shanghai — which involved the rationing of food and basic supplies — might be part of an effort by Beijing to experiment with a scenario in which it faced economic sanctions from Washington (perhaps after an invasion of Taiwan).

JPMorgan says Russia's economy is stronger than expected and will only suffer a shallow recession despite sanctions