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Reuters previously reported on a large Indian coal deal
involving the Chinese yuan, but the customs data underline how
non-dollar settlements are becoming commonplace.
India has aggressively stepped up purchases of Russian oil and
coal since the war in Ukraine began, helping to cushion Moscow
from the effects of sanctions and allowing New Delhi to secure
raw materials at discounts compared to supplies from other
countries.
Russia became India's third-largest coal supplier in July, with
imports rising by over a fifth compared with June to a record
2.06 million tonnes.
In June, Indian buyers paid for at least 742,000 tonnes of
Russian coal using currencies other than the U.S. dollar,
according to a summary of deals compiled by a trade source based
in India using customs documents and shared with Reuters, equal
to 44% of the 1.7 million of tonnes of Russian imports that
month.
Graphic: India coal imports from Russia vs rest of World,
https://fingfx.thomsonreuters.com/
gfx/ce/gkplgodklvb/
IndiaCoalImportsRussiaRow.png Indian steelmakers and cement
manufacturers have bought Russian coal using the United Arab
Emirates dirham, Hong Kong dollar, yuan and euro in recent
weeks, according to customs documents separately reviewed by
Reuters.
The yuan accounted for 31% of the non-U.S. dollar payments for
Russian coal in June and the Hong Kong dollar for 28%. The euro
made up under a quarter and the Emirati dirham around one-sixth,
the data from the trade source showed.
India's Ministry of Finance, which administers the customs
board, did not respond to emails seeking comment confirming the
documents. The Ministry of Commerce and Industry declined to
comment.
The Reserve Bank of India also did not respond to requests for
comment.
The RBI has approved payments for commodities in the Indian
rupee, a move it expects to boost bilateral trade with Russia in
its own currency.
The U.S. dollar has been the dominant currency for Indian
commodity imports, traders said, and the greenback makes up most
of the country's foreign exchange reserves.
For deals in a currency other than the dollar, lenders would
potentially have to send dollars to bank branches in the country
of the original currency, or banks they have tie-ups with, in
exchange for that currency to settle the trade.
KEEPING DOLLAR AT A DISTANCE
Two traders based in India that purchase coal for domestic
customers and a trader based in Europe that deals with Russian
coal said they expected the share of non-dollar transactions for
Russian coal to increase as banks and other parties explore ways
of cushioning themselves against any further tightening of
sanctions.
Buying Russian coal using the U.S. dollar is not illegal for
Indian firms.
Reuters was able to corroborate customs documents for four of
the 11 vessels in the summary of Russian coal trades in June
provided by the trade source, which showed payments made using
the yuan, euro and the Emirati dirham, using shiptracking data
and by speaking to a private customs agent based in India.
Another three vessels in the 11 deals in the trader's summary
were paid for using the Hong Kong dollar and the yuan, two trade
sources familiar with the transactions confirmed.
In one of those three deals, Jindal Steel and Power Ltd (JSPL)
imported 79,721 tonnes of so-called PCI coal in the vessel Zheng
Kai from Russia's Ust-Luga port using yuan, according to the two
sources.
Rival steelmaker Arcelormittal Nippon Steel India shipped in
35,000 tonnes of Russian anthracite coal using euros, a customs
document dated June 15 showed.
JSPL and Arcelormittal Nippon declined to comment.
Non-dollar imports continued into July.
Two Indian customs documents from last month reviewed by Reuters
showed that Indian companies agreed to pay for Russian coal
using Hong Kong dollars and Emirati dirhams.
India's JK Lakshmi Cement imported 10,000 tonnes of Russian
thermal coal in the bulk vessel Ada, according to a customs
document dated July 20. The invoice was valued at 14.62 million
Emirati dirhams ($3.98 million), and trader Swiss Singapore
facilitated the deal.
JK Lakshmi did not respond to calls or emails requesting a
comment. Swiss Singapore, owned by Indian conglomerate Aditya
Birla Group, did not respond to requests seeking comment.
Indian coal trader Chettinad Logistics imported 25,000 tonnes of
Russian thermal coal from Singapore-based trader Avani Resources
and paid in Hong Kong dollars, another customs document dated
July 20 showed.
Reuters was unable to contact Chettinad Logistics. Avani did not
respond to an email seeking comment.
($1 = 0.9764 euros)($1 = 7.8497 Hong Kong dollars)
($1 = 3.6729 UAE dirham)
(Reporting by Sudarshan Varadhan; Additional reporting by Swati
Bhat in Mumbai; Editing by Mike Collett-White and Christian
Schmollinger)
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