Russia’s Sberbank has reported a significant boost in its operations in India, defying the impact of Western sanctions. Anatoly Popov, Deputy CEO of Sberbank, revealed that trade between Russia and India nearly doubled to $65 billion in 2023, with Sberbank handling payments for up to 70% of Russian exports to India. This surge in trade comes as India emerges as a critical importer of Russian oil following the sanctions imposed on Russia over the conflict in Ukraine.
Sberbank, which is under Western sanctions, has successfully navigated these restrictions by fully integrating into India’s payment and interbank systems. “Sberbank is a full participant in all Indian payment and interbank systems. There are no restrictions on its operations,” said Popov. Unlike other markets, where transactions have faced challenges, Sberbank’s operations in India have been smooth, with 90% of transactions in roubles and rupees completed within a few hours.
To support its growing operations in India, Sberbank has significantly expanded its workforce in the country. The bank’s Indian offices in Delhi and Mumbai and an IT centre in Bengaluru saw a 150% increase in staff this year. This expansion reflects the growing interest of Russian businesses in the Indian market as an alternative amid the ongoing sanctions.
One of the critical challenges in the Russia-India trade relationship was the rupee surplus held by Russian companies, which hampered bilateral trade. However, Popov confirmed this issue has been resolved as Indian exports to Russia have increased. He emphasised that to achieve balanced trade, India’s exports to Russia need to increase tenfold, noting that India’s vast and self-sufficient economy is well-positioned to meet the needs of Russian importers.
Sberbank is also enhancing its financial services in India by offering hedging instruments, such as forwards and options, and rupee-denominated loans for Russian companies at lower interest rates than in Russia. Popov expressed gratitude to Indian regulators for enabling the bank to operate through rupee-denominated “vostro” accounts, facilitating seamless transactions.
As Sberbank continues to expand its footprint in India, Popov highlighted the effectiveness of the current mechanism for converting roubles and rupees, which does not require third-party currencies. He also suggested that stock exchange trade in rupees could further increase transparency in bilateral transactions.
