India to let Russia borrow & invest in domestic market amid West's sanctions on Kremlin

As the Russian administration recently promised to provide India with a whopping discount of 25-30% on the purchase of crude oil, the Government of India has allowed investment in its domestic market, ANI reported, citing its sources on Thursday. The decision of the Indian government comes at a time when the Russian economy has been impacted badly by a slew of economic sanctions imposed by the West and the European Union for the Kremlin's "unlawful" military aggression against its neighbouring country, Ukraine. Amidst the barrage of sanctions, India allowed Russia to invest in Indian corporate debt funds that could aid Moscow. According to the ANI sources, the development can be seen as a return gesture for the Russian offer of providing oil to India at a huge discount. On the other hand, energy-starved India has already begun to avail of this facility and build enough buffer stocks.

Moreover, the European countries limiting the import of Russian oil and gas - the United States, the European Union, the United Kingdom and Canada have banned certain Russian banks from SWIFT (Society for Worldwide Interbank Financial Telecommunications) - a secure messaging system for financial transactions between partaking banks that serves 11,000 financial institutions in over 200 countries and territories.  According to the news agency, Russian government officials have asked their Indian counterparts to relax India's External Commercial Borrowing (ECB) framework. By relaxing the ECB framework, Russian entities are authorised to invest in bonds of Indian companies and pay for these investments through an account with the Reserve Bank of India (RBI).

Ukraine war and the barrage of sanctions upon Russia

It is pertinent to mention here that Russia initiated a full-fledged war against Ukraine nearly two days after Russian President Vladimir Putin signed a decree recognising the independence of breakaway regions Donetsk and Luhansk. Putin's action came despite the West's repetitive warning and speculations about his ill intention to invade Ukraine. Until then, Ukrainian President Volodymyr Zelenskyy had called his Russian counterpart to meet him, seeking a resolution to avert the war. Ever since Putin started an invasion of Ukraine, the West and several European countries imposed sanctions to penalise Russia for its action. Apart from imposing sanctions, hundreds of top brands took an exit from the Russian market as a mark of protest.