No needed for Dollar: India uses different currencies to pay for Russian oil and coal

10:23 16.08.2022 •

Indian companies swapping dollar for Asian currencies to buy Russian coal, informs Reuters from New Delhi. They say: “Indian companies are using Asian currencies more often to pay for Russian coal imports, according to customs documents and industry sources, avoiding the U.S. dollar and cutting the risk of breaching Western sanctions against Moscow”.

Russia became India's third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tonnes.

Reuters previously reported on a large Indian coal deal involving the Chinese yuan, but the customs data underline how non-dollar settlements are becoming commonplace.

In June, Indian buyers paid for at least 742,000 tonnes of Russian coal using currencies other than the U.S. dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tonnes of Russian imports that month.

Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents separately reviewed by Reuters.

“KEEPING DOLLAR AT A DISTANCE” – that’s the conclusion which the Agency makes.

The yuan accounted for 31% of the non-U.S. dollar payments for Russian coal in June and the Hong Kong dollar for 28%. The euro made up under a quarter and the Emirati dirham around one-sixth, the data from the trade source showed.

The Bank of India has approved payments for commodities in the Indian rupee, a move it expects to boost bilateral trade with Russia in its own currency.

Two traders based in India that purchase coal for domestic customers and a trader based in Europe that deals with Russian coal said they expected the share of non-dollar transactions for Russian coal to increase as banks and other parties explore ways of cushioning themselves against any further tightening of sanctions.

JK Lakshmi did not respond to calls or emails requesting a comment. Swiss Singapore, owned by Indian conglomerate Aditya Birla Group, did not respond to requests seeking comment. Reuters was unable to contact Indian coal trader Chettinad Logistics – they did not respond to an email seeking comment.

India's Ministry of Finance, which administers the customs board, did not respond to emails seeking comment confirming the documents. The Ministry of Commerce and Industry declined a comment for English agence.

Reuters frankly recognized that no one in India wants to talk to them.