The launch of international trade in Indian rupees could lead to annual savings of $30 -- 36 billion in hard currency and widen the scope for such trades with countries in the region, easing pressure on exchange rate, experts told ET.The mechanism, which can be kicked off without delay with Russia, may be favourable for Indian government bonds as well. The surplus balance can be used to invest in the local capital market by entities in India's trading partners under the bespoke model, if the surplus balance is opened in a special vostro account to be opened under the rupee payment mechanism. When a country is facing a record high current account deficit, such rupee-denominated trades with select countries save dollar outflows on account of imports, said chief economist Madan Sabnavis. The move should bring in rupee investments in local asset classes, including bonds and equity, according to Sabnavis. A vostro account is held by a bank on behalf of another. India's imports to Russia amounted to around $2.5 billion a month in April and May - $30 billion on an annual basis. Analysts believe that this will increase to a monthly average of $3 billion over the fiscal year, or $36 billion in all. B Prasanna, head of global markets, said this could help reduce India's hard currency outflows to the extent of $3 billion per month, while providing Russia with INR currency reserves to be deployed in India and provide welcome demand for India bonds. The window opens up the possibility for countries such as Russia, Iran or even Sri Lanka to engage with New Delhi while they are facing global economic sanctions or need financial aid. Sabnavis said that the rupee requires an expansion of the basket of key currencies to seven or eight, including our local unit from five currently. The currencies that make up the majority of the world's forex reserves are the dollar, euro, renminbi and pound. The dollar remains the world's top reserve currency, but its dominance has eroded to some extent. The greenback accounted for just over 60% of all allocated reserves at the end of the 2022 calendar year, down from 65% in the same period in 2016 according to the FT, citing IMF data over a week ago. India's trade deficit, or excess of imports over exports, swelled to a record $25.63 billion in June, driven by imports of petroleum, coal and gold. Exports were muted, causing the gap to widen. If Russia-India trade comes under this INR settlement route, Russia's surplus and India's deficit will be as INR balances of Russian banks with India's banking system, according to Ananth Narayan, associate professor at the SP Jain Institute of Management and Research. The Bank of Baroda Economic Research data shows that India imported $5.04 billion from Russia in April and May, as net trade was $4.78 billion in the first two months of FY 23.