There is no plan to pay in rupees for crude oil bought by India’s PSUs from Russia. This information was given to the Parliament on Monday. India buys less than one percent of its total oil imports from Russia. But Western sanctions against Russia for its invasion of Ukraine have provided a way to trade in rupees for oil and gas purchases.
Rameshwar Teli, Minister of State for Petroleum and Natural Gas, said in a written reply to a question, “At present there is neither any contract with the Public Sector Undertakings nor any agreement to purchase crude oil from Russia or any other country in Indian Rupees. The proposal is under consideration. He has not given detailed information about it.
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Sources said trade with Russia is being settled in dollars as the international payment mechanism has so far been kept out of the purview of Western sanctions. In addition, unlike the sanctions imposed by the US on Iran over its controversial nuclear program, oil and energy trade with Russia has not been banned.
This essentially means that any country or company is free to buy oil and other energy resources from Russia and use international payment systems to settle business. This was not the case with Iran, which was ‘cut off’ from the international money and security transfer system, ‘SWIFT’. Also, companies or entities investing in or buying oil from Iran were banned.