Sergei Lavrov discussed the problem of “Russian rupees” with the Indian Foreign Minister

Russian Foreign Minister Sergei Lavrov announced the militarization of the Asia-Pacific region (APR) due to the penetration of NATO armed forces and infrastructure into the region. He spoke about this on September 7 at the 18th East Asia Summit (EAS), which is taking place in the Indonesian capital Jakarta. “The North Atlantic Alliance, relying on the established bloc deterrence mechanisms, is promoting confrontational projects AUKUS (including the USA, Great Britain and Australia), which provides for the deployment of military-strategic complexes with nuclear components in the region,” the minister said. The military-technological alliance AUKUS was formed in 2021, it is built around the project of equipping the Australian fleet with nuclear submarines, as well as basing nuclear submarines of the United States and Great Britain in this country.

Lavrov also spoke in favor of strengthening the architecture of “equal and indivisible security” in the Asia-Pacific region and emphasized the importance of maintaining mechanisms of multilateral cooperation within the framework of the Association of Southeast Asian Nations (ASEAN, which includes 10 countries in the region).

The East Asia Summit is a forum of leaders of 18 countries in East and Southeast Asia, where a wide range of political and economic projects of common interest are discussed. Meetings in this format are held annually in conjunction with ASEAN events. This year, Russia is represented at the summit by Lavrov, and the United States is represented by Vice President Kamala Harris. Joe Biden himself chose to visit Delhi instead of Jakarta, where the G20 summit will be held from September 9 to 10.

It is important for Russia to maintain its constant presence at all dialogue platforms in the Asia-Pacific region, says Ekaterina Koldunova, director of the ASEAN Center, associate professor of the Department of Oriental Studies at MGIMO. The EAC is intended to be a broad platform that includes all key global players, including the US and China. “It is important for the countries of the region to have this institutionalized platform within which participants could discuss issues of regional politics and security,” the expert noted. “Moscow is interested in dialogue with all states of the region with the aim of creating an inclusive security architecture in the Asia-Pacific region.” The promotion of AUKUS in East and Southeast Asia alarms the states of the region, since the organization was created outside the framework of the ASEAN-centric institutional architecture and is unlikely to take into account the interests of neighboring countries, continues Koldunova: “For them, this bloc is a serious challenge, which they cannot yet provide a consolidated response to.” answer”.

The Russian minister also held talks with Indonesian Foreign Minister Retno Marsudi, and later with his Indian counterpart Subrahmanyam Jaishankar. The issue of stuck rupees in the accounts of Russian exporters in Indian banks was discussed with him. “Our Indian friends are aware of the problem and are making efforts to resolve it to mutual satisfaction,” said Lavrov’s deputy, Andrei Rudenko. Lavrov spoke about the accumulated “billions of rupees in the accounts of Indian banks” during his trip to India in early May. He also noted that the issue of transferring these funds to another currency is being discussed.

According to India’s Ministry of Commerce and Industry, in the 2022/23 financial year, Russia exported goods to India worth more than $46 billion and imported $3.1 billion.

In June, Bloomberg reported that due to Indian currency restrictions, up to $1 billion in rupees was accumulating in the accounts of Russian companies every month. A month later, Reuters, citing sources, wrote that Indian oil refineries began paying for imports of Russian raw materials in Chinese yuan. On September 5, Deputy Chairman of the Russian Central Bank Alexey Zabotkin announced a gradual reduction in the balances of rupees in the accounts of Russian exporters.

Rupees are difficult to convert into other currencies, so Russian energy exporters can get rid of them only through barter exchange or purchasing goods on the domestic Indian market, says Grigory Sosnovsky, director of the BCS Ultima network. But Indian proposals are unlikely to interest the fuel and energy complex: in the field of service maintenance, in the production of equipment or pipes, India is not a key producer. The majority of bilateral payments in the region continue to be conducted in US dollars. According to Sosnovsky, Chinese yuan or UAE dirhams could potentially displace the dollar in mutual settlements between Russia and the ASEAN states and India.