According to Indian customs documents obtained by the media, India’s infrastructure leader is using RMB to pay for imported Russian coal, and this trend continues to increase.
Documents show that UltraTech Cement, India’s largest cement manufacturer, purchased 157,000 tons of coal from Siberian Coal Energy Company (SUEK). However, unlike Indian traders who usually use U.S. dollars for international trade, the invoice for this order stated The value of the goods is shown to be 172 million yuan, and the goods have now arrived at the Indian port.
India’s largest cement company buys Russian coal
Settlement in RMB
Reuters reported on the 29th that the details of the above-mentioned transaction came from an Indian customs document. The total amount of coal purchased by the Indian Chaoke Group was approximately 157,000 tons, and the total price they paid to Russia was 172,652,900 yuan. The payment was made in RMB, and the recipient was the Russian company’s branch in Dubai, United Arab Emirates.
Screenshots from foreign media reports
Reuters commented in the report that India and Russia conduct transactions in RMB in order to avoid various sanctions imposed on Russia in the international financial market since the Russia-Ukraine conflict. This practice also promotes the internationalization of the RMB.
The report also mentioned that India has always hoped to establish a transaction system for payment of goods in Indian rupees, but this system has not yet been completed, and Russian companies have conducted a large number of transactions in RMB in the past few years.
Therefore, during the Russia-Ukraine conflict, India chose to use RMB to conduct transactions with Russia. Generally speaking, Indian merchants would pay U.S. dollars at the exchange rate to their branches in mainland China or Hong Kong, or to Chinese banks with which they have cooperative relationships. The remittance party exchanges the equivalent value of RMB for these Indian companies for Indian merchants to pay to Russia.
Regarding this transaction method, the Indian government stated that it was “knowing” about it. A serving Indian official said that using RMB to pay countries other than China was very rare in the past, but this situation may arise due to the Russia-Ukraine conflict. More to come in the future.
According to a Russian coal trader, the current problem for them is how to send the rubles back to Russia. Traders can now pay in Dubai in Chinese yuan, as well as receive U.S. dollars or UAE dirhams and convert them to rubles. Because it is easier to exchange RMB for rubles, it is more popular than other currencies.
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“Russian crude oil is discounted, buy, buy, buy!”
In addition to coal, India also imports large amounts of Russian oil.
After the conflict between Russia and Ukraine broke out, Western countries have tightened sanctions on Russia. Previously, US President Biden twice named India on relevant matters, and White House officials warned India not to stand on the “wrong side of history.”
The Wall Street Journal recently reported that, according to industry sources, the Indian government has urged the country’s state-owned oil companies to import large quantities of cheap crude oil from Russia to strengthen business ties with Russia.
Some Indian oil industry executives said that in recent weeks, Indian government officials have strongly encouraged them to find ways to continue buying Russian “discounted” crude oil. Currently, the state-owned Indian Oil Corporation is negotiating with Russian energy giant Rosneft Oil to increase supply.
“The outside world is increasingly worried that India is the ‘back door’ for Russian oil to enter Europe.” The British Guardian published an article with this title on the 26th, saying that the amount of oil imported and exported by India shows that some refined Russian crude oil may eventually appear in Europe. gas station.
According to reports, India is now buying Russian crude oil at a discount of up to 30%, which has weakened the effect of Western countries’ sanctions against Russia. In May, Russia earned US$20 billion (approximately 133.7 billion yuan) in revenue from oil exports, which has reached the level before the outbreak of the Russian-Ukrainian military conflict. There are growing concerns that India is becoming a “back door” for Russian oil into Europe, given its surge in oil imports.
According to foreign media reports, according to statistics from Kepler, India did not import Russian crude oil last year. In April this year, tankers unloaded nearly 1 million barrels of Russian oil per day, and in May, they still unloaded nearly 800,000 barrels of Russian oil per day. bucket.
Kepler analyst Humayun Falakshahi predicted: “By June, Russia will replace traditional suppliers such as Iraq, Saudi Arabia and the United Arab Emirates to become India’s largest oil supplier.” Since the quality of Russian oil is close to that of the Gulf The quality of crude oil produced makes the above transition easier and refineries do not need to adjust their production processes.
Russian oilThe discounts are so attractive that they more than offset the higher shipping costs. Falakshahi highlighted that ship transport from the Baltic Sea to India takes “four to six weeks”, while the journey from the Gulf takes “less than a week”. Prices offered in Russia may also offset higher insurance costs.
So despite the embargo, Russian oil may continue to flow to the West, taking a long detour through Indian refineries. “We should start to see an increase in fuel exports from India in the coming weeks,” Farakshahi said.
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