India using SWIFT global payment system to settle Russia dollar trade: source

US Dollar

Indian companies are using the SWIFT global payment system to settle dollar payments with Russia, a top trade official said on Wednesday, even though many Russian banks are blocked from the network due to Western sanctions.

The West blocked access to SWIFT for several Russian banks, including Sberbank and VTB, soon after Moscow invaded Ukraine in February last year to target Russian trade, making it harder for Russian companies to do business. SWIFT underpins financial transactions globally.

“We are using SWIFT for dollar payments," the official, who did not want to be named, said, when asked about the payment gateway being used for Russian payments.

The official did not give more details about the banks that Indian traders were using to make the dollar payments.

India's trade and finance ministry did not immediately respond to an email requesting comment.

India's imports from Russia have increased nearly five times in the April 2022 to February 2023 period to $41.56 billion from $8.54 billion, compared with the same period the prior year, according to data released by the government on Wednesday.

Last month, Reuters reported India's Russian oil imports climbed to a record 1.4 million barrels per day (bpd) in January, up 9.2% from December, with Moscow still the top monthly oil seller to New Delhi, followed by Iraq and Saudi Arabia.

India has been using varied currencies to settle trade with Russia since the war in February last year.

"Payments happen in different currencies, including dollar, euros, dirham," the country's Directorate General of Foreign Trade Santosh Kumar Sarangi told reporters.

Indian refiners payed for most of their Russian oil purchased via Dubai-based traders in United Arab Emirates dirhams instead of U.S. dollars, Reuters has reported.