Geopolitics Drives India to Exclude Yuan in Trade with Russia

ANBOUND
2 min readMar 20, 2023

Since the outbreak of the Russia-Ukraine conflict, trade ties between India and Russia have grown stronger, making India one of the largest buyers of Russian oil and discounted coal. At the same time, in order to avoid the impact of Western sanctions, India and Russia have been exploring trade settlement methods other than the U.S. dollar.

However, Reuters recently quoted sources as saying that India has asked banks and traders to avoid using the yuan to pay for imports from Russia and to use the UAE dirham as the settlement currency instead.

Indian officials involved in the development of the policy said that India is “uncomfortable” with foreign trade settled in yuan due to long-standing political differences between India and China. Therefore, until relations between the two countries improve, India will not allow settlement in yuan.

In 2022, India’s largest cement producer, UltraTech, bought a shipment of Russian coal in yuan, which had raised alarm among Indian authorities, according to data.

Sources said that in the past few weeks, India’s major oil refineries have been notified by the government in this regard. Meanwhile, the Reserve Bank of India, which handles payments related to India-Russia trade, has also privately confirmed that it will not encourage businessmen to continue using the yuan for trade settlement.

It is worth noting that Indian officials have said that Russia is actually keener to use the yuan for settlement, as it helps it buy various goods from China.

Taken together, the marginalization of the yuan settlement by the Indian government and central bank is not surprising against the backdrop of growing tensions between India and China.

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自俄乌冲突爆发以来,印俄两国间的贸易关系愈发紧密,印度也因此成为了俄罗斯石油和折扣煤炭的最大买家之一。同时,为了规避西方制裁影响,印俄两国也一直在探索美元以外的贸易结算方式。

然而,路透社日前引述消息人士说法指出,印度近期已要求银行和贸易商避免使用人民币支付从俄罗斯进口的商品,并改用阿联酋迪拉姆作为结算货币。

参与制定该政策的印度官员表示,由于印度与中国间长期存在政治分歧,印度对以人民币结算的对外贸易“感到不舒服”。因此,在两国关系改善之前,印度不会允许用人民币结算。

资料显示,2022年,印度最大的水泥生产商UltraTech用人民币购买了一批俄罗斯煤炭,这曾引起印度相关部门的警惕。

消息人士透露,在过去几周内,印度各大炼油厂都已接到了政府的相关通知。同时,负责处理印俄贸易相关款项的印度储备银行也在私下证实,将不会鼓励商人继续使用人民币进行贸易结算。

值得注意的是,印方官员表示,俄罗斯实际上更热衷于使用人民币结算,因为这有助于其从中国购买各类商品。

综合而言,在中印两国关系日益紧张的背景下,印度政府和央行对人民币结算的边缘化并不令人意外。

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ANBOUND

ANBOUND is a multinational independent think tank, specializing in public policy research, incl. economy, urban and industry, geopolitical issues. Est. 1993.