Denis Alipov, Russian Ambassador to India, said that the Vostro trade settlement mechanism (Rupee payment) did not work well

Aiming at strengthening economic ties with India, Russia's envoy to India on Monday said payment problems hinder trade and there is a need for "extra efforts" from banks and exporters to overcome this hurdle.

Denis Alipov, Russian Ambassador to India, said that the Vostro trade settlement mechanism (Rupee payment) did not work well.

"Some extra efforts are needed by companies and banks to explore the conditions," he said.

He, however, did not elaborate on what he meant by "extra efforts".

In response to a question on the sidelines of an MCCI-organised interactive session, he emphasised the necessity for additional efforts from Indian banks and exporters to resolve this issue.

Though he admitted that resolving the payment method would require much fine-tuning, Alipov said banks are willing to cooperate.

On the defence deal for the advanced long-range surface-to-air missile defence system S-400, Alipov acknowledged delays but said supplies are on but in a new schedule.

Sanctions led to Russian banks being banned from the Swift banking network.

Despite these challenges, Alipov remained optimistic, anticipating a trade boom once the payment mechanism is streamlined.

Simultaneously, the Russian diplomat expressed interest in greater collaboration in the MSME sector, with a sizable delegation heading to West Bengal for BGBS, the two-day investment summit starting Tuesday.

There is interest in various sectors such as energy, defence, space, logistics, education, railways, and hospitality.

The bilateral trade in FY'23 reached USD 49 billion, solidifying Russia as India's fourth-largest trade partner.