Indian firms using Asian currencies to buy coal from Russia

Indian firms are using Asian currencies more often to pay for importing coal from Russia avoiding the US dollar and cutting the risk of breaching Western sanctions against Moscow.

According to customs documents and industry sources_ India has aggressively stepped up purchases of Russian oil and coal since the Ukraine war began_ helping to cushion Russia from the effects of sanctions and allowing New Delhi to secure raw materials at discounted prices compared to supplies from other sources.

Russia became India's third-largest coal supplier last month_ with imports rising by over a fifth compared with June to a record 2.06 million tonnes.

In June_ Indian buyers paid for at least 742_000 tonnes of Russian coal using currencies other than the U.S. dollar_ equal to 44 per cent of the 1.7 million of tonnes of Russian imports.
 
Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates (UAE) dirham_ Hong Kong dollar_ Chinese yuan and euro in recent weeks_ according to customs documents.

The yuan accounted for almost 31 per cent of the non-U.S. dollar payments for Russian coal in June and 28 per cent of non-dollar payment was done by the Hong Kong dollar. The euro made up around 24 per cent and the UAE dirham around 17%_ the data from the trade source showed.
The Reserve Bank of India (RBI) has approved payments for commodities in the Indian rupee_ a move it expects to boost bilateral trade with Russia in its own currency.
 
The greenback has been the dominant currency for Indian commodity imports_ traders said_ and the greenback makes up most of the country's foreign exchange reserves.

For deals in a currency other than the US dollar_ lenders would potentially have to send dollars to bank branches in the country of the original currency_ or banks they have tie-ups with_ in exchange for that currency to settle the trade.