Table of Contents

APSC Answer Writing (Daily) based on Assam Tribune – 07/4/2025

For APSC CCE and other Assam Competitive examinations aspirants, practicing Daily Answer Writing is vital. This blog covers the most important Main question and its model Answer from the Assam Tribune today (07-04-2025).

Mains Question & Model Answer

Q. Discuss the significance and challenges of establishing a Rupee-Ruble trade settlement mechanism between India and Russia in the current global geopolitical context. (15 Marks)

Introduction:
Amid evolving global geopolitics and Western sanctions on Russia, India’s exploration of a Rupee-Ruble payment system marks a pivotal shift in bilateral trade and financial autonomy.

Body:

I. Why the Rupee-Ruble Mechanism is Significant

De-dollarization of Trade
- Reduces dependence on the US Dollar and SWIFT system.
- Enhances financial sovereignty in global trade.
- Example: Similar models used by Russia-China (Yuan-Ruble).
Continuity in Energy Imports
- Allows uninterrupted import of Russian crude oil and defense equipment despite sanctions.
- India’s Russian oil imports surged post-2022.
Boost to Bilateral Trade
- Facilitates trade in local currencies → less exchange rate risk.
- Bilateral trade target: $30 billion by 2025 (MEA, India).
Strategic Autonomy in Foreign Policy
- Strengthens India’s stance as a multipolar actor in international relations.
- Avoids Western pressure while preserving strategic ties with Russia.

II. Challenges in Implementing the Mechanism

Trade Imbalance
- India imports far more from Russia than it exports.
- Accumulation of Rupees by Russia is of limited utility.

Source: DGFT data (2024)

Currency Convertibility Issues
- Rupee is not fully convertible on capital account → restricts usability in global markets.
Banking Infrastructure
- Lack of established correspondent banks and settlement protocols.
- Risk of triggering secondary sanctions on Indian banks.
Legal and Regulatory Barriers
- RBI norms, FEMA compliance, and SWIFT alternatives need framework adaptation.

III. Geopolitical Context and International Implications

Factor	Implication
Western Sanctions on Russia	Push for alternative financial systems
BRICS De-dollarization Talks	Aligns with India’s wider strategic goals
G20 Presidency Initiatives	India’s advocacy for inclusive financial architecture

Conclusion:

The Rupee-Ruble trade mechanism is a pragmatic step toward strategic autonomy and regional financial resilience. A well-calibrated and phased approach—backed by multilateral coordination and robust financial safeguards—can make India a key player in shaping future global trade norms.

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