A host of Russian companies spent nearly $4 billion from their rupee vostro accounts to buy Indian-made arms and various other things over the past six to eight months, Livemint reported.
The rupee vostro accounts keep a foreign entity's holdings in an Indian bank rupees.
Moneycontrol could not independently verify the report.
Russia was among the 22 countries that were allowed to open special rupee vostro accounts (SRVAs) with Indian lenders to trade in local currency.
As per the report, the Russian firms did not see investment opportunities in India. As per another Livemint report, they had about $8 billion of funds lying in their rupee vostro accounts. In the past eight months, they have utilised half of it, the report stated.
The Reserve Bank of India in July 2023 permitted 20 banks operating in the country to open 92 SRVAs of partner banks from 22 countries as part of efforts to promote bilateral trade in local currencies.
In a written reply to the Lok Sabha, Minister of State for Commerce and Industry Som Parkash also informed that an agreement was signed between the Reserve Bank of India (RBI) and the Central Bank of the UAE on July 15.
This would enable exporters and importers to invoice and pay in their respective domestic currencies, paving the way for the development of a bilateral foreign exchange market.
Anupriya Patel, another junior minister in the commerce and industry department, said India's exports surged 36.6 percent in the last five years from $330.07 billion in 2018-19 to $450.95 billion in 2022-23.
Also Read | What is a Special Rupee Vostro account?
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
