India and Russia are developing a central bank digital currency (CBDC) settlement mechanism for bilateral trade as their central banks explore alternative ways to process cross-border payments.
Herman Gref, chief executive of Russia’s largest lender Sberbank, said the Bank of Russia and the Reserve Bank of India (RBI) were working directly on the proposed system. Sberbank is supporting the initiative as trade between the two countries continues to expand.
Russia began the nationwide rollout of the digital ruble on 1 September, while India has tested its e-rupee since 2022 and is examining potential international uses. Gref said demand for digital currencies could increase as the technology becomes available for overseas settlements.
The RBI had not commented on his remarks at the time of the report.
India introduced its wholesale digital rupee pilot in November 2022, followed by a retail pilot the following month. In its 2024-25 annual report, the central bank said it intended to develop further functions and cross-border applications after gaining experience with domestic testing.
The value of the digital rupee in circulation rose from 234.04 crore rupees in fiscal 2024 to 1,016.46 crore rupees in fiscal 2025.
Russia’s digital ruble became available through 12 systemically important banks during the first phase of its rollout. Those banks must provide digital ruble services, while large merchants have begun supporting payments. Major telecoms companies including MTS, Rostelecom and MegaFon also prepared to accept the currency from 1 September.
Retailers with annual revenue above 120 million rubles were included in the first stage of mandatory acceptance. The requirements are due to be extended to additional banks and merchants in later phases.
The digital ruble operates alongside cash and existing non-cash rubles. Customers can use wallets provided through participating banking applications connected to the Bank of Russia’s platform.
Wider BRICS payments plans
The discussions form part of wider efforts among BRICS members to connect national payment systems and use digital currencies for trade settlements.
The Kremlin said digital currency payments would be discussed with BRICS members and partner countries at the New Delhi summit. India has supported CBDC-based settlement during its BRICS chairmanship this year, while Prime Minister Narendra Modi has backed their use for bilateral trade and cross-border payments without presenting the proposal as a challenge to the US dollar.
The RBI has proposed linking BRICS CBDCs, including the e-rupee, to enable direct settlements. Such a system would require common technical standards and settlement rules. Foreign exchange swap arrangements have also been considered as a way to manage trade imbalances.
Russia had previously advocated an independent BRICS payment system using blockchain and digital currencies. The issue gained prominence after major Russian banks lost access to the SWIFT financial messaging network following Russia’s invasion of Ukraine in 2022.
Trade imbalance
Bilateral trade reached nearly $60 billion in India’s fiscal 2026, driven largely by Indian purchases of Russian oil. The countries are targeting $100 billion by the end of the decade.
Russia has accumulated billions of dollars in rupees because its exports to India have exceeded Indian exports in return. Gref said the surplus was no longer a major obstacle because Russian companies had found ways to use the funds, including investing some in Indian federal government securities.
The RBI allows accumulated rupee balances to be invested in Indian projects and securities or used for future purchases of goods and services. Gref said the trade imbalance remained above $50 billion and called for more Indian goods to be sold in Russia.
