Lead:
A recent news revealed that Indian refineries' payment methods have attracted widespread attention as they are using yuan to pay for crude imports from Russia. The move not only reveals a complex trade dispute between India and Russia, but also reflects India's ambitions in terms of international currency status. Before diving into this topic, let's review how this controversial decision came to be.
The importance of crude oil trading is self-evident. Between India and Russia, the trade relationship is complicated by the way currencies are paid.
Several Indian refineries recently paid for crude imports from Russia in yuan. Two of them are private refineries, as well as a state-owned refinery, the Indian Oil Company, which is the largest Indian buyer of Russian crude.
But it doesn't stop there, as India has been trying to persuade Russia to accept Indian rupee payments instead of yuan. This has led to a series of disputes and controversies.
The reason why India is so determined is on the one hand to improve the international status of the rupee, and on the other hand to seize the payment initiative to reduce the cost of crude oil procurement in long-term cooperation. However, Russia is reluctant to accept the rupee, why?
First of all, the exchange rate of the rupee is unstable, and the risk of accepting large rupees is too high for Russia, which is struggling economically. In addition, Russia can hardly buy the goods it needs from India, which has led to a mountain of rupees that are difficult to put to practical use.
India has been Russia's largest buyer of crude oil amid Western sanctions, which has also made India increasingly influential. However, differences over payment methods have not been resolved until recently, when Indian private companies began to firmly use the yuan for payments, which appeared to be dismissive of the Indian government.
The renminbi is an acceptable foreign currency for Russia, so they are eager for India to continue importing large quantities of Russian crude oil and paying for it in yuan. For India, they are trying to raise the rupee's position on the international stage and maintain the initiative in payments, which is why Indian companies insist on using the yuan.
However, there is no simple solution to this currency dispute between India and Russia, as the political, economic and geopolitical factors involved are very complex.
Indian state-owned enterprises have also begun to use yuan payments, which seems to indicate that India itself has accepted the reality. Attitudes on this issue remain divided, but in any case, the story continues to evolve and we will continue to monitor this controversial oil trade.