First rupee oil payment to the UAE: authorities indicate India is seeking for further transactions and has no specific goals

 First rupee oil payment to the UAE: authorities indicate India is seeking for further transactions and has no specific goals

First rupee oil payment to the UAE: authorities indicate India is seeking for further transactions and has no specific goals

With over 85% of the nation's oil requirements coming from imports, India is dedicated to sourcing its oil at the best price, diversifying its supply, and adhering to international agreements like price controls in the event that a three-pronged approach is implemented. about oil from Russia.

As it trades with other suppliers, India, the third-largest energy consumer in the world, is assisting in elevating the local currency to a global level with its first-ever payment in rupees for crude oil acquired from the United Arab Emirates, according to authorities. Seeking for agreements; internationalization is a non-goal process. With over 85% of the nation's oil requirements coming from imports, India is dedicated to sourcing its oil at the best price, diversifying its supply, and adhering to international agreements like price controls in the event that a three-pronged approach is implemented. about oil from Russia.

This method attempted to reduce transaction costs by doing away with currency conversion, even as it boosted imports of Russian oil—which some in the West had boycotted during the conflict in Ukraine—and helped save billions of dollars. want to settle the deal in rupees instead. Indian Oil Corporation (IOC) agreed to buy one million barrels of crude oil from Abu Dhabi National Oil Company (ADNOC) in Indian rupees shortly after India and the UAE struck a rupee settlement deal in July. Paid in.

Additionally, a portion of Russian oil imports are expressed in rupees. The US dollar has been the standard payment currency for imports of crude oil for a number of decades, according to authorities, and it has historically had cheap hedging costs and high liquidity.

However, the Reserve Bank of India has permitted more than a dozen banks to settle trade in the rupee with 18 nations since last year in an effort to strengthen the rupee's position in cross-border payments. Since then, authorities claimed, India has been pressuring major oil exporting nations like Saudi Arabia and the United Arab Emirates to accept Indian money for trade settlements. The first example of this was in August of this year, when IOC paid ADNOC in Rs.

He expressed the possibility of additional similar agreements in the future while emphasizing that there is no goal since internationalization is a process that takes time to complete. "We have to be careful that this (rupee settlement) does not increase costs and is not detrimental to business in any way," said a government source.

He said that India is in the greater national interest. "There are issues when you have each ship loaded with crude oil worth millions of dollars, but there are not many when you settle a trade in rupees when the amount is not huge," he added. Keeping it in mind when handling the problem. The rupee's internationalization will lessen the need for dollars and lessen the Indian economy's vulnerability to shocks to the world currency market.

Few individuals are purchasing Indian rupees, according to a report from the Parliamentary Standing Committee that was sent to lawmakers last week. According to officials, the circumstances are appropriate for the fiscal year 2022–2023, and this year there has been a turnover of Rs.

"No crude oil imports were paid in Indian Rupees by oil PSUs during FY 2022–2023. The repatriation of cash in the preferred currency has been a source of worry for crude oil suppliers, such as ADNOC in the United Arab Emirates. It also brought attention to how expensive transactions are related to it. Based on the committee's report that was presented to Parliament last week, the ministry informed the panel that there are risks associated with currency swings while converting money. According to a portion of the statement, crude oil suppliers charge IOCs more for transactions, meaning that India Oil Corporation (IOC) has disclosed that it has to pay more for transactions.