 |
| This is the first time India has bought crude oil from UAE in its own currency (Rupee) | Symbol Image: Reuters |
India has taken a step towards bringing the rupee to the global level, according to the Times of India. But not only the UAE, the country is also trying to buy oil in rupees from other countries.
Indian government officials say they have no goal in internationalizing the rupee, it's just a process.
India is the third largest energy consumer in the world. They import 85% of the required oil from abroad, but the country is proceeding with a three-pronged strategy in this regard. They are - buying oil at the cheapest price, diversification of import sources and not breaking international price limits, i.e. adhering to the prices set by the Western world for Russian oil.
Many Western countries stopped buying Russian oil after the start of the Russia-Ukraine war, but India saved hundreds of billions of dollars by buying cheap Russian oil. Now India is trying to buy oil in rupees to save dollar conversion costs.
In July last year, India signed an agreement with the United Arab Emirates to buy crude oil in the Indian currency. After that, the state-owned Indian Oil Corporation of India started the process of importing oil from Abu Dhabi National Oil Company in Indian currency.
Apart from the UAE, India also buys large quantities of crude oil from Russia. Many companies in that country are paid oil prices in Indian currency. It has been previously reported in various media that there was a long discussion on the introduction of international trade with Russia completely in Indian currency, but in the end, Moscow did not agree to it.
India has been buying crude oil in US dollars for decades. Experts claim that it was causing some damage to the Indian economy. Due to fluctuating dollar exchange rates, Indian companies often had to pay more than they needed.
In this situation, India has started trading with various countries in rupees. This year commercial transactions with Bangladesh in Indian rupees have been inaugurated. India is doing transactions with 19 countries including Bangladesh in rupees. In July 2022, the central bank Reserve Bank of India took special measures for this purpose, even though India was already trading in rupees with several countries.
Apart from Bangladesh, other countries with which India is currently trading in rupees are Afghanistan, Bahrain, Cuba, Egypt, Iran, Iraq, Kuwait, Oman, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Tanzania, Uzbekistan, United Arab Emirates. And Sri Lanka.