Directions: Read the following passage and answer the following questions based on the given passage.

As India gears up to become a 3-trillion-dollar economy in the current year and a 5-trillion economy by the year 2024, all major powers of the world compete to announce the development of relations with India to be one of their main priorities. In the meantime, time-tested friends and allies, Russia and India, are making a fresh and substantiated effort of bringing the scale of their economic cooperation up to the level adequate to their enhanced political partnership. Removal of bottlenecks and obstacles to bilateral trade and investments being the current priority for both sides. One of the main constraints in trade between Russia and India is the lack of smooth independent banking infrastructure connecting the two countries. Russian- Indian trade turnover now stands at approximately 10 bln USD, with the governments of both countries confident that it has the potential to triple to 30 bln USD by the year 2025.

Mutual investments can reach a level of 15 bln USD. Provided financial systems of both countries are ready for the challenge. Russia is India’s leading partner in defence supplies: over 60% of all India’s purchases are coming from Russia. With large recent deals, such as the procurement of S-400 missile defence systems (estimated cost over 6 bln USD), this share is likely to grow. Although India aims to diversify its’ defence supplies and localize development and production, Indian officials have iterated consistently that India’s relations with Russia in the sphere of defence will remain a priority despite the unprecedented pressure coming from the West. Russia sees these policies on behalf of its’ Western partners as a manifestation of an unfair competition aimed at ousting Russia from international markets – be it defence equipment, energy or expertise. Defence-related deals between Russia and India have demonstrated the vulnerability of the existing banking mechanisms of the two countries to third party actions. With US dollar payments put on hold in 2018, India and Russia had to urgently look for alternative solutions. Options on the table included coming back to trading in rupees and roubles, in euros, Singaporean dollars, etc. Importantly, this situation attracted the attention of bankers and decision-makers on both sides to the issue of payments. Memories of lucrative trade between India and the Soviet Union conducted in national currencies run deep and this mechanism cannot be excluded from the list of alternatives entirely.

However, it is obvious that the world has changed, it is immensely more interdependent and connected today than in the times of the Soviet Union and this type of trading mechanisms a limitation to globalised business actors on both sides.

Q:

What has been the issue that has attracted attention of banking officials in India and Russia?

• 1
  Use of an efficient platform and trusted financial interaction for a large number of actors globally.
• 2
  Finding alternative to payments as US Dollar payments have been put on hold.
• 3
  Russian banks are ever denied access to global system of financial messages.
• 4
  Increased transparency and centralization of the international banking system.
• 5
  Set the international trends in financial solutions.