India, Russia explore digital currency payments for trade in cross-border breakthrough

India and Russia are working on a mechanism to use digital currencies for bilateral trade settlements, potentially opening a new route for faster and more efficient cross-border payments as the two countries seek to expand trade.

Herman Gref, chief executive officer of Russia’s biggest lender Sberbank, said the Russian central bank and the Reserve Bank of India were working on the mechanism. The initiative comes as both countries look to ease payment frictions in bilateral commerce and deepen economic ties, reported Bloomberg on Friday.

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“Now it’s only beginning, but we see huge opportunity for digital currency for all settlements between the countries,” Gref told reporters in New Delhi, where India is hosting the annual BRICS summit. Digital currencies would see greater demand and faster growth, he was quoted as saying.

Russia rolled out its central bank digital currency, the digital ruble, on September 1 through systemically significant banks, including state-controlled Sberbank. India launched its digital currency on a pilot basis in 2022, and it is now used in some government programmes.

The Kremlin said on Thursday that Russia would discuss the use of digital currencies for trade settlements with BRICS members and partner nations at this week’s summit in New Delhi. India has also backed the use of central bank digital currencies for bilateral trade and cross-border payments.

BRICS looks to make cross-border payments faster

The India-Russia discussions come against the backdrop of a broader BRICS effort to develop more efficient ways of moving money across borders.

Finance ministers and central bank governors of BRICS countries said on Friday that they had discussed the possibility of efficient cross-border payment mechanisms. In a joint statement, they acknowledged the work of the BRICS Payment Task Force (BPTF) in exploring practical solutions under the BRICS Cross-Border Payments Initiative, drawing on guidance from leaders in the Kazan and Rio Declarations.

The BPTF has also studied the cross-border interoperability of payment and messaging channels and discussed promoting trade settlements and investments using the local currencies of BRICS countries, according to the statement.

The grouping said the task force should respect national priorities and recognise that there is no “one-size-fits-all” approach to cross-border payments.

“We encourage the BPTF to continue discussions, building on the ongoing work, to facilitate practical solutions for cross-border payments among BRICS countries, which are fast, low-cost, more accessible, efficient, transparent, and safe,” the statement said.

The statement came a day before the two-day BRICS summit in New Delhi.

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Rupees pile-up loses its bite

For India and Russia, the push for new payment channels also addresses a problem that emerged as bilateral trade surged after Russia’s invasion of Ukraine in 2022: Russian companies accumulated large rupee balances in vostro accounts held with Indian banks.

Gref said the issue was no longer a significant challenge because companies had found ways to use the rupees. Some of the excess funds had also been invested in federal government securities, he said, without giving a figure.

“Now it’s not the problem in our trade and we try to increase the trade between the countries,” Gref said.

The RBI had allowed rupee balances held in vostro accounts to be used for investments in Indian projects or securities, as well as for future purchases of goods and services.

$60 billion trade, but imbalance persists

India and Russia have been among each other’s top five trading partners since 2022, when India sharply increased purchases of Russian oil.

Bilateral trade reached nearly $60 billion in India’s fiscal 2026, with Russian oil accounting for the bulk of India’s imports. The two countries want to take trade to $100 billion by the end of the decade, but the flow remains heavily tilted towards Russia.

“We need to bring more Indian exports and more opportunities to the Russian market and this is our goal,” Gref said, adding that the more than $50-billion trade imbalance needed to be corrected.

The wider BRICS financial agenda extends beyond payments. The finance ministers and central bank governors also reiterated the need to reform the Bretton Woods Institutions, including the IMF and World Bank, to give emerging markets and developing economies greater voice and representation.

They also backed a growing role for the New Development Bank, encouraging it to expand local-currency financing, diversify funding sources and support high-impact development projects. The statement also reaffirmed BRICS cooperation on taxation, including efforts to curb illicit financial flows and promote a fair allocation of taxing rights.

(With inputs from Bloomberg, PTI)