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15 Mar, 2022 09:00

India looks to boost non-dollar trade with Russia

Transactions are to be carried out in rupees and rubles
India looks to boost non-dollar trade with Russia

The world’s third largest oil consumer, India, is considering buying Russian crude and other commodities at discounted prices using domestic currency. This comes as the US is encouraging countries to avoid trading with Russia amid the conflict in Ukraine.

“Russia is offering oil and other commodities at a heavy discount. We will be happy to take that. We have some issues like tanker insurance cover and oil blends to be resolved. Once we have that we will take the discount offer,” an Indian government official told Reuters.

Transactions will be carried out in India’s and Russia’s national currencies to evade the US dollar and related sanction policies. According to officials, work to set up a rupee-ruble trade mechanism is already underway.

To date, India has not spoken out against Russia’s ongoing military operation in Ukraine, which has been heavily criticized by a number of Western states and has led to a package of sanctions introduced against Moscow. While Russian oil has not been sanctioned, some international traders have stayed away in fear of facing penalties from dealing with the country. This has forced Russia to introduce record discounts on its crude exports.

India imports nearly 85% of oil it consumes, but only about 3% of the commodity comes from Russia. Media reports citing trade sources on Monday stated that the country’s major refiner, Indian Oil Corp, has just bought 3 million barrels of Russian Urals oil from trader Vitol at a discount of $20-$25 a barrel for delivery in May. According to sources, IOC does not consider the purchase a problem as neither oil itself, nor Vitol have been sanctioned.

India is also reportedly considering buying raw materials from Russia and Belarus for fertilizer production amid skyrocketing prices on commodities.

For more stories on economy & finance visit RT's business section