Indian companies swapping dollar for Asian currencies to buy Russian coal

Indian companies are moving towards several Asian currencies more often to be able to pay for Russian coal imports, according to customs documents and industry sources. Most companies do avoid the US dollar and cut the risk of breaching Western sanctions against Moscow.

One large Indian coal deal involves the Chinese yuan, but the customs data underline how non-dollar settlements are becoming ordinary.

India has aggressively stepped up purchases of Russian oil and coal since the war in Ukraine began, helping to cushion Moscow from the effects of sanctions and allowing New Delhi to secure raw materials at discounts compared to supplies from other countries.

Russia became India’s third-largest coal supplier in July, with imports rising by over a fifth compared with June to a record 2.06 million tons. In June, Indian buyers paid for at least 742,000 tons of Russian coal using currencies other than the US dollar, according to a summary of deals compiled by a trade source based in India using customs documents and shared with Reuters, equal to 44% of the 1.7 million of tons of Russian imports that month.

Indian steelmakers and cement manufacturers have bought Russian coal using the United Arab Emirates dirham, Hong Kong dollar, yuan and euro in recent weeks, according to customs documents.