New Delhi. After the Ukraine war, major changes have been seen in global politics and economy. To put pressure on Russia, the US targeted energy exports and imposed several tough sanctions. These sanctions also affected the countries that were buying oil and other resources from Russia. India too has not remained untouched by this pressure, but despite this, Russia has found an alternative way and that is trade through gold.
Russia’s new move: distance from dollar, entry of gold
The biggest objective of US sanctions was to isolate Russia from the global financial system. Especially limiting dollar based transactions. In response to this pressure, Russia has started using gold as a medium of payment in trade with India.
This move is not only being considered a strategy to avoid sanctions, but also an attempt to challenge the dominance of the dollar. According to Russian media reports, Russia sold a record amount of gold to India in the first ten months of last year. This figure has reached its highest level in many years, which clearly shows that the nature of economic cooperation between the two countries is changing.
Tariff on India, still relief for Russia
The US had imposed additional tariffs on India for buying Russian oil, taking the total US tariffs on India to a very high level. The Trump administration argued that Russian energy purchases provide Moscow with resources to continue the war. However, after these tariffs, India reduced its purchase of Russian oil to some extent, but this did not completely weaken Russia’s economic condition. On the contrary, Russia made gold along with oil an important weapon of its trade. This is helping it compensate for the shortage of foreign exchange.
Sale of gold from National Wealth Fund
Another major change in Russia’s economic strategy is related to its National Wealth Fund. Due to decline in income from oil and gas, Russia is now working on a plan to increase the sale of foreign currency and gold from its own funds. According to reports, Russia has already used up a large part of its gold reserves in recent years. This decision shows that Russia is now trying to manage its economy by moving away from traditional methods. Gold, which has always been considered a safe asset in times of crisis, has now become a strategic weapon for Russia.
What does it mean for India?
The increasing trade of gold with Russia is important for India in many ways. On the one hand, it meets India’s jewelery and reserve requirements, while on the other hand, it shows that India is prioritizing its economic interests despite global pressures. At the same time, this step also reflects India’s policy in which it adopts balanced diplomacy instead of relying on any one pole.
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