India’s transactions with Russia in Asian currencies instead of dollars

New Delhi: India is using Asian currencies instead of dollars to buy coal from Russia, the Reserve Bank of India has approved payments in Indian rupees for the commodity as well.

According to British news agency Reuters, Indian companies are often using Asian currencies instead of US dollars to pay for Russian coal imports to reduce the risk of violating Western sanctions imposed on Russia, according to customs documents and industry sources. are

A major coal deal from India was earlier reported using Chinese yuan, but customs data shows how transactions in currencies other than dollars is becoming common.

India has aggressively increased its purchases of Russian oil and coal since the start of the war in Ukraine, which has helped Russia avoid the effects of sanctions, and India has enjoyed concessions from Russia vis-à-vis other countries. Got the property.

Russia became India’s third-largest coal supplier in July when its imports rose five-fold to 2.6 million tonnes compared to June.

Indian buyers paid for at least 742,000 tonnes of Russian coal in currencies other than the US dollar in June, according to a summary of deals compiled by trade sources in India using customs documents. That is equivalent to 44 percent of the total 1.7 million tons of Russian imports this month

Steel and cement makers in India have bought Russian coal in recent weeks using UAE dirhams, Hong Kong dollars, yuan and euros, according to customs documents.

In June, 31 percent of payments for Russian coal were made in U.S. dollars and 28 percent in Hong Kong dollars, with data from trade sources showing less than a quarter of non-US dollar payments in euros and a sixth in Emirati dirhams. Part is formed.

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The Reserve Bank of India has approved payments for commodities in Indian rupees, a move that is expected to boost bilateral trade with Russia in its currency.

The US dollar has been the dominant currency for Indian commodity imports and most of the country’s foreign exchange reserves are in dollars, traders say.

For deals in a currency other than dollars, the buyer may need to send dollars to bank branches (or banks they have contracted with) in the home currency country to settle the trade in exchange for that currency. will

Traders who buy coal for domestic consumers in India and deal in Russian coal in Europe say they expect the use of currencies other than the dollar to trade in Russian coal to increase as banks and other parties themselves are looking for ways to protect them from the effects of possible more stringent sanctions.

It is not illegal for Indian companies to buy Russian coal using US dollars.

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