India still using dollars for majority payments of Russian oil

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India is still using dollars for a majority of its payments for oil imports from Russia, and only a small portion of the payment is being done in a mix of currencies, including dirhams and Chinese Yuan, a government official said.

“Indian exports to China are less, therefore India has low access to Yuan to begin with. If someone has received payments in Yuan only then they can make payments in Yuan from India. Yuan is not a very freely traded currency, so unless you have exported something and have received payment in Yuan, you cannot really find it in the investment market,” this person said.

According to a second official, rupee trade between India and Russia is “impossible” unless trade between them is more balanced.

India’s imports from Russia, the former’s second-largest import source nation, surged 132% in April-June to $16.04 billion primarily due to oil purchases, while Moscow ranks 31 as New Delhi’s export destination, according to latest official figures

Russia has accumulated billions of rupees in Indian banks which it cannot use, the country’s Foreign Minister Sergei Lavrov had said back in May, pointing to a ballooning trade surplus with India.

Efforts by New Delhi to reduce this trade gap that is in favour of Russia is also facing issues due to various sanctions imposed on Russia after the Ukraine conflict.

“There is certain category of electronic goods that India can export to Russia, but items such as certain network equipment cannot be exported to Moscow because of possibility of sanctions,” the first official said.
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