In a significant move to deepen financial ties, Russia's largest bank, Sberbank, has unveiled ambitious plans to channel investments into India's capital markets and facilitate access for Russian retail investors to the benchmark Nifty50 index. The announcement was made by the bank's CEO and Chairman, Herman Gref, during President Vladimir Putin's two-day visit to New Delhi.
Strategic Investments and Market Access
Sberbank's strategy involves direct investments in Indian government securities, alongside creating a pathway for Russian private capital. Gref revealed that just three days prior, the state-run lender launched a specialized financial instrument allowing individual Russian investors to gain exposure to the Nifty50, which tracks the 50 largest Indian companies on the National Stock Exchange.
"We launched a special instrument for the private investors in Russia to get the opportunity to invest in the Nifty50 index," Gref stated. He expressed confidence that this would generate greater interest in Indian companies among Russian investors. This initiative addresses a pressing issue: billions of dollars worth of rupees are currently idling in Indian banks due to Western sanctions that have complicated trade settlements in dollars or euros.
Expanding Operations and Trade Facilitation
The bank, which already processes a majority of India's exports to Russia, is set for a substantial expansion in the country. With existing branches in two cities, Sberbank aims to establish up to 10 branches and a large corporate office in New Delhi spanning 40,000-50,000 square feet. Its long-term vision includes offering a full suite of B2B and B2C banking services over the next decade.
In a major development for trade, Gref confirmed that Sberbank has secured a special licence to export gold to India, a country with massive demand for the precious metal. This comes alongside ongoing pilots for cashless payment systems for Russian tourists and explorations to link India's UPI with Russia's financial network.
Addressing the Rupee Surplus and Future Outlook
A core driver for these investments is the surplus rupee balance Sberbank holds in India, estimated to be worth "a few billion dollars." Investing these funds in Indian treasury bills and capital markets presents a viable solution. Gref emphasized the need to develop market instruments for the rupee-ruble trade rather than fixing exchange rates, expressing optimism about its natural progression.
The CEO voiced strong confidence in the Indian economy, comparing its current potential to China's growth story 15 years ago and predicting sustainable annual growth of 6-7% over the next decade. "It's the right moment to invest in India," he asserted.
While bilateral trade hit a record $68.7 billion in FY25, the imbalance—with Indian imports (mostly crude oil) at $63.84 billion versus exports of $4.88 billion—remains a concern. Gref stressed the necessity of diversifying the trade basket beyond oil, especially in light of recent US sanctions on Russian oil suppliers. Enhancing imports of Indian goods, he suggested, would build more sustainable and mutually beneficial economic relations.
