Russian firms buy $4 billion worth of India-made arms, pay in Indian rupee

Exporters in Russia, who started trading with India using Indian rupees, have recently spent nearly $4 billion to buy India-made defence equipment and armaments, among other imports and Indian securities. This amount come from funds which were lying idle in their Vostro accounts.

Till October, Russian exporters held about $8 billion in Vostro accounts. These accounts were set up to facilitate trade between Russia and India, using Indian rupees and are managed by a domestic bank on behalf of a foreign bank.

As per a report by the Mint, due to a lack of investment opportunities in India, the money held in the Vostro accounts of Russian exporters remained unspent.