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No takers for Indian rupees as payment for oil imports
From the Press Trust of India
via The Times of India, Mumbai
Monday, December 25, 2023
India's push for the rupee to be used to pay for import of crude oil has not found any takers as suppliers have expressed concern on repatriation of funds and high transactional costs, the oil ministry told a parliamentary standing committee.
The default payment currency for all contracts for import of crude oil is the U.S. dollar as per the international trade practice. However, in a bid to internationalize the Indian currency, the Reserve Bank of India on July 11, 2022, allowed importers to pay with rupees and exporters to be paid in rupees.
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While there has been some success with non-oil trade with a select few countries, the rupee continues to be shunned by oil exporters.
"During FY 2022-23, no crude oil imports by oil public-sector undertakings were settled in Indian rupees. Crude oil suppliers (including the UAE's ADNOC) continue to express their concern about the repatriation of funds in the preferred currency and highlighted high transactional costs associated with conversion of funds, along with exchange fluctuation risks," the oil ministry told the parliamentary department-related standing committee.
The ministry, whose subimissions are part of the committee's report that was tabled in Parliament last week, said Indian Oil Corp. has informed that it incurred high transaction costs as crude oil suppliers pass on the additional transactional costs to IOC." ...
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