The head of the Federation of Indian Export Organisation (FIEO) said India will soon begin trading in Rupees with Russia. The development comes after the State Bank of India agreed to facilitate a new mechanism for the proposal. Russia will soon name a bank within two weeks to settle payments for mutual settlement.

“State Bank of India has come forward for facilitating trade in rupees with Russia and some other banks have also shown interest,” A. Shaktivel, president of FIEO, a body set up by the trade ministry to promote exports, told reporters.

India is believed to reach the decision after its exports to the Balkan power slumped due to Western sanctions on Moscow in the aftermath of the Ukraine invasion.

The Reserve Bank of India in July issued a circular to national banks to introduce a mechanism to settle international trade in Rupees to free the local currency from the extreme volatility in global currencies due to the rise of dollar.

India’s exports to Russia reduced by a third in the April-July period due to sweeping Western sanctions on Moscow.

It was also reported that Moscow stock exchange was working on a plan to launch trade in Indian rupee to move away from dollar and euro.