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India considers relief for exporters hit by Ukraine crisis: Sources
India is looking at lenders' letter of credit and soft loan guarantees for exporters hit by a cash crunch following Russia's invasion of Ukraine and Western sanctions imposed on Moscow, two people familiar with the matter told Reuters.
Indian banks are scrambling after bills for imports from Russia have started bouncing and payments for exports have been stuck.
A government official, who declined to be named as the discussion was not public, said Indian exporters owed about $500 million to Russia and that the government would seek letters of credit or loans from banks to help ease the crisis. can guarantee.
"Letters of credit is the most likely option," the official said.
A senior banker familiar with the developments said "letter of credit or some form of bank guarantees can be given, so that trade settlement is not hampered. We are looking into it".
The finance ministry and Reserve Bank of India did not immediately reply to requests for comment.
CHEAP LOANS
The government is also looking at having state-owned banks lend to exporters at reduced rates or provide funds to them directly up to the amount of pending payments from Russia and Ukraine.
The official said the decisions could be taken in a couple of weeks.
The banking source said then the central bank could follow up and "find solutions to how bilateral trades can be settled."
India exported $3.33 billion worth of goods to Russia in 2021, mainly pharmaceutical products, tea and coffee, while imports totalled $6.9 billion, including defence goods, mineral resources, fertilizers, metals and precious stones.
"We will first look to ease the pain of Indian exporters. Import settlement issue resolution could take some time," the government official said.
India, which has deep trade and defense ties with Russia, has refrained from publicly criticizing its longtime arms supplier and urged both sides to end hostilities, allowing its other countries, including the United States, to Disappointment has arisen among colleagues.
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