Novak’s remarks indicate a gradual diversification in India’s payment methods for Russian crude, reflecting both practical trade considerations and geopolitical positioning. While most transactions remain in roubles, the introduction of the yuan for some payments suggests India is exploring alternatives that could reduce exposure to Western sanctions or dollar dependence.
India’s significant spending—2.5 billion euros in September—highlights its growing reliance on Russian crude, which now accounts for nearly 40% of its imports, a sharp rise from under 1% before the 2022 Ukraine conflict. The increase was facilitated by steep discounts and reduced European demand, allowing India to secure energy supplies at favorable rates.
Western sanctions on Russia have accelerated the use of alternative currencies, with the yuan and UAE dirham emerging as practical substitutes in energy trade. India’s partial adoption of the yuan may also signal closer alignment with broader BRICS and Asia-centric financial practices, diversifying its foreign exchange exposure while maintaining strategic oil imports.
Despite these adjustments, the majority of India-Russia oil payments remain in roubles, reflecting Russia’s continued preference for its national currency and the established systems already in place for energy transactions. The situation illustrates the complex interplay of economic pragmatism, sanctions avoidance, and geopolitical strategy shaping global energy trade.
