Russia proposes bilateral trade in Indian rupee with Bangladesh

Russia has proposed using the Indian rupee for bilateral trade with Bangladesh to mitigate the crisis stemming from US sanctions. It has also expressed interest in creating a separate payment structure and opening a branch of a Russian bank in Dhaka.

These proposals are expected to be discussed at the upcoming Bangladesh-Russia Intergovernmental Trade Commission meeting scheduled for September-October, according to the Economic Relations Division (ERD).

Following the Russia-Ukraine war, US sanctions on Russian banks have complicated conventional payment channels, leading Moscow to propose the rupee as an alternative currency. The same issue has affected the loan repayment for the Rooppur Nuclear Power Plant, with banks reportedly hesitant to process payments in Chinese yuan due to similar concerns. While installments have been deposited into a Russian account at Sonali Bank, they have yet to be transferred to Russia.

Russia has also put forward proposals for forming a 'Russia-Bangladesh Business Council,' creating a registered list of apparel exporters and providing assistance in Special Economic Zones.

Trade data suggests that in the current fiscal year (July-May), Bangladesh exported goods worth approximately $24.50 million to Russia, while importing essential commodities like fertilisers and wheat. At the upcoming meeting, Bangladesh is expected to prioritise technology transfer, as well as cooperation in energy, agriculture, the digital economy and skill development.

Meanwhile, a Russian delegation led by Chargé d'Affaires Vyacheslav Sentyurin recently met with Commerce Minister Khandaker Abdul Muqtadir. During that meeting, Russia expressed interest in supplying approximately 280,000 tonnes of urea fertiliser to BSCI on a G-to-G basis, at $10 per tonne below the international market price. The country also expressed interest in exporting sunflower oil, chickpeas and lentils. The Commerce Minister stated that Bangladesh is committed to expanding economic ties with Russia based on mutual interests.