Sberbank is launching a closed-ended mutual fund tied to India’s Nifty50 Index, offering Russian investors a direct way to deploy the billions of rupees accumulated in India due to sanctions. Since these rupee balances cannot be converted into dollars, the fund provides Moscow with a viable avenue to invest idle vostro account funds into Indian equities.
The Nifty50-linked product will give Russian investors diversified access to India’s top-performing companies, marking the first significant effort to channel stranded rupees into the country’s capital markets. Experts say India is encouraging Russia to reinvest these reserves into sectors such as infrastructure, logistics, defence, energy, pharmaceuticals, and high-tech industries.
This approach resembles Japan’s model of long-term infrastructure financing that benefits both sides—Russia finds productive use for surplus rupees, and India gains capital for growth. The RBI has eased regulations by allowing banks to open special rupee vostro accounts without prior approval and permitting Russian entities to invest in government securities and bonds.
With bilateral trade surging to $68 billion in FY25, Russia’s rupee holdings have grown sharply. Sberbank now plans to invest $100 million in India and expand operations across 10 cities, further strengthening its role as a critical financial bridge between the two nations.
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