No country is ready to accept payment in rupees for crude oil import

MUMBAI: India's efforts to internationalize the rupee do not seem likely to succeed in the near future, with most exporters refusing to accept payments for Indian crude oil purchases in rupees. In the financial year 2022-23, not a single crude oil import bill payment was possible in rupees. However, in the current financial year, it was stated that a few payments were made in Rs.

As the financial transactions of crude oil deals are generally done in dollars, crude oil exporters are insisting on payment in dollars. Crude oil exporting countries are also saying that accepting payments in rupees is proving expensive. In July of last year, the Reserve Bank allowed importers-exporters of the country to do international transactions in rupees.

In the current year, the first payment for oil import from UAE has been made possible in Rs. Some payments from Russia were also made possible in Rs.

Some exporting countries are dealing in rupees for exports of products other than crude oil, but payments in rupees are not readily accepted by crude oil exporting countries, government sources said.

In the financial year 2022-23, the crude oil import bill could not be settled in rupees by the public sector oil companies. Sources also said that apart from the difficulty of using the rupee elsewhere, its transaction costs are high compared to the dollar, and concerns have been expressed to India on behalf of the exporting countries.

A special mechanism has been set up to settle international trade in rupees. In the financial year 2022-23, India's crude oil import figure was $157.50 billion. Iraq, UAE, Russia and Saudi Arabia are the main suppliers of India's crude oil. There are huge dollar outflows from India to pay crude oil bills.