India and Russia are considering the possibility of using the yuan as a base currency to create a settlement mechanism for trade in national currencies under the ruble-ruble scheme. This was reported on March 14 by the Mint newspaper, citing government sources.

“We can consider a floating exchange rate system. As a starting point, you can take a third currency, perhaps the yuan,” the source said.

He added that such an arrangement would not require an exact exchange rate to be tied to a currency.

The local currency swap mechanism is essential for the resumption of trade between New Delhi and Moscow, as India buys a lot of products from Russia, especially in the fields of defense and nuclear energy, while the India exports pharmaceutical, agricultural and other products to Russia. Federation, said a source of the newspaper. India, the world’s third-largest oil importer, is also considering buying Russian oil at preferential rates to ease inflationary pressures.

“We are working on a monetary agreement to facilitate trade, especially since we also plan to increase the purchase of oil from Russia,” a government official told the publication on condition of anonymity.

According to the newspaper’s sources, due to Western sanctions against Moscow, payments to Indian exporters amounting to around $500 million for goods already shipped to Russia are not proceeding.