NEW DELHI: Indian companies are using Asian currencies more often for payments Than Nga imports, according to customs documents and industry sources, avoid the US dollar and cut the risk of violating Western sanctions on Moscow.
Reuters previously reported on a major Indian coal deal involving the Chinese yuan, but customs data underscores how non-dollar settlements are gaining popularity.
India has actively increased its purchases of Russian oil and coal since the war in Ukraine began, helping to protect Moscow from the effects of sanctions and allowing New Delhi to secure raw materials at a discount. compared with supplies from other countries.
Russia became India’s third-largest coal supplier in July, with imports up more than a fifth from June to a record 2.06 million tonnes.
In June, Indian buyers paid at least 742,000 tonnes of Russian coal in currencies other than the US dollar, according to a summary of transactions compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44 percent of 1.7 million tons of Russian imports that month.
Indian steelmakers and cement producers have been buying Russian coal in United Arab Emirates dirhams, Hong Kong dollars, yuan and euros in recent weeks, according to financial reports. whether customs is considered separately by Reuters.
The yuan accounted for 31% of non-U.S. dollar payments to Russian coal in June, and the Hong Kong dollar accounted for 28%. Data from trade sources show that the euro accounts for less than a quarter and the Saudi dirham around one in six.
India’s Finance Ministry, the customs regulator, did not respond to emails seeking comment confirming the documents. The Ministry of Trade and Industry declined to comment.
The Reserve Bank of India also did not respond to a request for comment.
The RBI has approved payments for goods in Indian rupees, a move it hopes will boost bilateral trade with Russia in its currency.
The US dollar has become the dominant currency for India’s goods imports, and the greenback makes up the bulk of the country’s foreign exchange reserves, traders said.
For transactions in currencies other than the dollar, lenders are likely to have to send dollars to bank branches in the country of origin or banks with which they have relationships, exchange take that currency to pay for the transaction.
Two traders based in India buying coal for domestic customers and one trader based in Europe dealing with Russian coal said they expect the share of non-dollar transactions for Russian coal to increase. rise as banks and other parties seek to fend off themselves. tighten sanctions.
Buying Russian coal in US dollars is not illegal for Indian companies.
Reuters was able to corroborate customs documents for four of the 11 ships in a summary of Russia’s coal transactions for June provided by a trade source, which showed payments were made in yuan. Emirati renminbi, euros and dirhams, using ship operations data and by speaking to a private customs agent based in India.
The other three ships in the 11 transactions in the trader’s summary were settled using Hong Kong dollars and yuan, two trade sources familiar with the confirmed transactions.
In one of those deals, Jindal Steel and Power Ltd (JSPL) imported 79,721 tonnes of PCI coal on board the Zheng Kai from the Russian port of Ust-Luga in yuan, according to two sources.
Rival Indian steelmaker Arcelormittal Nippon Steel has shipped 35,000 tonnes of Russian anthracite coal in euros, a customs document dated June 15 showed.
JSPL and Arcelormittal Nippon declined to comment.
Non-dollar imports continued into July.
Two Indian customs documents from last month reviewed by Reuters show Indian companies have agreed to pay for Russian coal in Hong Kong dollars and Emirati dirhams.
India’s JK Lakshmi Cement imported 10,000 tonnes of Russian thermal coal aboard the ship leaving Ada, according to a customs document dated July 20. The bill was worth $3.98 million, and Swiss trader Singapore had facilitate this transaction.
JK Lakshmi did not respond to calls or emails requesting comment. Swiss Singapore, owned by Indian conglomerate Aditya Birla Group, did not respond to a request for comment.
Indian coal trader Chettinad Logistics imported 25,000 tonnes of Russian thermal coal from Singapore-based Avani Resources and paid for it in Hong Kong dollars, another customs document dated July 20 showed.
Reuters could not contact Chettinad Logistics. Avani did not respond to an email seeking comment.