Russia has proposed settling trade with Bangladesh in Indian rupees, a move aimed at bypassing Western sanctions and reducing reliance on the U.S. dollar, FirstPost reported.

The plan includes establishing a dedicated payment mechanism and opening a Russian bank branch in Dhaka, potentially expanding the rupee’s role in global commerce.

Russia has reportedly suggested that future trade with Bangladesh be conducted in Indian rupees. This proposal comes as sanctions continue to disrupt payments through Russian banks, making dollar-based transactions increasingly difficult. The idea will be discussed during upcoming bilateral talks, with Moscow pushing for a structured mechanism to facilitate rupee settlements.

The plan also involves opening a Russian bank branch in Dhaka to streamline financial operations. This would allow Bangladesh to settle payments directly in rupees, avoiding complications linked to dollar transactions. Such a step could mark a significant shift in regional trade practices, especially as India has already expanded rupee-based trade settlements with over thirty countries.

Bangladesh has faced challenges in repaying loans for the Russian-backed Rooppur Nuclear Power Plant. An earlier attempt to use the Chinese yuan for repayments reportedly failed, leaving Dhaka searching for alternatives. The rupee-based settlement could provide a workable solution, ensuring smoother financial flows and reducing exposure to currency volatility.

If implemented, this arrangement would further strengthen the rupee’s position in international trade. For India, it represents another opportunity to promote its currency as a credible alternative to the dollar in a multipolar financial system. For Russia, it offers a way to bypass restrictions imposed by Western sanctions, while for Bangladesh, it provides a practical mechanism to meet obligations without relying on unstable channels.

The proposal also reflects broader geopolitical shifts. Russia’s outreach to Bangladesh through rupee trade highlights Moscow’s intent to deepen ties with South Asia, while simultaneously supporting India’s ambition to internationalise its currency. This trilateral dynamic could reshape trade flows in the region, especially in sectors like energy, defence, and infrastructure.

Bangladesh’s acceptance of the rupee mechanism would not only ease repayment for the Rooppur project but also open avenues for wider trade in goods and services. It could reduce transaction costs, stabilise payments, and strengthen financial resilience against external shocks. However, successful implementation will depend on the willingness of all parties to establish robust frameworks and ensure confidence in the rupee’s stability.

This development underscores the growing trend of countries seeking alternatives to the dollar in global trade. With India’s rupee gaining traction and Russia actively promoting non-dollar settlements, Bangladesh could become a key participant in this evolving financial landscape.

Agencies