India is exploring the possibility of replacing the dollar and euro with the rupee and rouble in its trade with old ally Russia — a move that would be tantamount to throwing a lifeline to Russian President Vladimir Putin, increasingly cornered by western sanctions.

New Delhi and Moscow have decided to set up a panel of experts from banks from the two nations that may be willing to trade in the national currencies of India and Russia, senior officials from both countries have confirmed to The Telegraph.

Russia already has such a mechanism in place with China, and a direct payment structure with India will further reduce Moscow’s dependence on the US dollar at a time Washington and its European allies are ramping up sanctions against it.

India, a votary of such mechanisms with as many major countries as possible, will also gain because of the immunity payments in national currencies bring from fluctuations in currency market pegged at the dollar.

“The way we see it, it’s a win-win,” a Russian official said. “And it will demonstrate the strength of our bilateral ties.”

In absolute numbers, Russia doesn’t even figure among India’s top 15 trading partners. The annual bilateral trade between the nations is just over $10 billion — compared to the $100 billion trade India enjoys with both the US and China. But the traded commodities include key technology and military equipment that are on their own costly.

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