Putin says Russia is rerouting trade to China and India

Putin says Russia is rerouting trade to China and India

CNN Business

President Vladimir Putin said Wednesday that Russia is diverting trade to “trusted international partners” such as Brazil, India, China and South Africa, as the West tries to sever economic ties.

“We are actively engaged in redirecting our foreign trade flows and economic contacts towards reliable international partners, primarily the BRICS countries,” Putin said in his video opening address to participants of the virtual BRICS Summit.

The acronym “BRICS” refers to an informal grouping of the five developing economies.

According to Putin, trade between Russia and the BRICS countries increased by 38% and reached 45 billion dollars in the first three months of the year.

“Contacts between Russian business circles and the business community of the BRICS countries have intensified,” Putin said. “For example, negotiations are underway to open Indian chain stores in Russia. [and to] increase the share of Chinese cars, equipment and hardware in our market.”

Russia is also increasing oil exports to China and India, which have been buying barrels at a deep discount. China’s crude oil imports from Russia soared to a record high in May, displacing Saudi Arabia as the country’s top supplier.

Putin added that Russia’s messaging system between financial institutions is open to connecting banks from the five countries, and that Moscow is finding new ways to conduct transactions without relying on currencies such as the dollar or euro.

“Together with the BRICS partners, we are developing reliable alternative mechanisms for international agreements,” Putin said.

In his speech, Putin accused the West of neglecting “the basic principles of [the] market economy” such as free trade.

“It undermines commercial interests on a global scale, negatively affecting the well-being of people, in effect, of all countries,” he said.

The BRICS summit, hosted by Beijing, is Putin’s first international forum with the heads of other major economies since he ordered the invasion of Ukraine in late February.

Western sanctions have isolated Russia from large sectors of the world economy and pushed the country into a deep recession. But Moscow continues to make money on exports, especially as energy prices rise. The International Energy Agency estimates that Russia’s oil export revenue rose to about $20 billion in May.

— Julia Horowitz contributed to this report.

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