Russia's "de-dollarized trade" with India is a face-melting farce
Good riddance to oil-for-rupees, the biggest scam of 2023 (so far)
India and Russia have reportedly abandoned their plan to switch to rupees for bilateral trade. The short-lived scheme was widely praised as a blackbelt judo-attack against US dollar hegemony.
In reality, oil-for-rupees was terrible in every conceivable way.
Here’s how this ephemeral settlement system would have worked:
India, using rupees, gobbles up all the discounted Russian crude it can get its hands on.
India processes this “sanctioned” oil, and then exports it to the West for delicious dollars and euros.
Russia accumulates a mountain of rupees because India’s national currency isn’t fully convertible, and in the best-case scenario can be exchanged for rubles only after great difficulty and long delays.
Russia can’t buy stuff with its Mount Everest of rupees because Indian manufacturers want to be paid in dollars.
Indian exports to Russia are miniscule, creating a titanic trade imbalance in which Moscow ships oil to India in exchange for currency that it doesn’t need and can’t even use.
Who benefits? Definitely not Russia.
Let’s dive into the details. At the end of April, Kommersant published an excellent synopsis of Russia’s “de-dollarized” trade with India:
Russian exports to India almost quadrupled from April 2022 to January 2023, according to the country’s Ministry of Industry and Trade. Such rapid growth was primarily due to the increased supply of oil, coal and fertilizers.
Imports from India, on the other hand, decreased, in particular, due to a decrease in supplies of machinery and equipment to the Russian Federation. Trade between countries is accompanied by difficulties with settlements - foreign banks often block payments, and the transition to rupees and rubles is limited due to the peculiarities of currency regulation and a strong imbalance in mutual supplies. […]
From April 2022 to January 2023, trade between the countries increased to $39.8 billion [up from $9.9 billion in the previous fiscal year]. Russian exports accounted for $37.28 billion [93% of total bilateral trade]. […]
India's demand for oil is expected to continue to grow - this country is increasing production and exports of petroleum products to Europe against the backdrop of an embargo on the import of such products from Russia. [India’s petroleum exports to the European Union have reportedly risen by 22% over the last year, while sales to the United States nearly tripled in April compared to the previous month.]
The pronounced imbalance of trade between Russia and India complicates the transition to settlements in national currencies - the rupees received from the sale of Russian goods cannot be spent on the purchase of products of Indian manufacturers (payments are mainly made in dollars). […]
The rupee’s conversion into foreign currency is carried out only within India on the stock exchange or in authorized banks. The rupee has limited convertibility, and its exchange in large volumes requires the permission of Indian regulators.
The good news is that oil-for-nothing was aborted before it could do serious, irreversible damage.
The bad news is that BRICS-friend India will continue paying in dollars for cheap Russian crude, which will continue to be rerouted to the Satanic Nazi West at a premium. (Indian refineries have also been experimenting with using the UAE dirham, which is pegged to the dollar.)
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That one is highly ironic, by the way, because in the heyday of dismembering the USSR one of the biggest problems was the so-called "rupee overhang". as the USSR was sitting on a mountain of rupees and did not have the slightest idea of what to do with them all. Then they invented some "scheme", as usual, to channel that mountain into their own pockets, like the rest of the Soviet budget,, and the rupees magically disappeared, like pretty much everythng else of potential value.
After all, if you got that mountain for free anyway, does it make a difference to you if you make Indian manufacturers sell stuff to you in rupees but for 2-3-5 times the normal price and if you can then sell those products for the hated dollars and euros?
The Soviet ruble was also fully convertible - at the black market rate. Nobody was talking about "dedollarization" though at that time, for everyone wanted to "dollarize" as fast as possible - rsulting in all those Nabiullinas today.
No no Edwards take is all wrong like usual. Supplying Europe and especially Ukraine with all the oil it needs requires a truly multipolar effort which only BRICS can provide. The unipolar satanist energy needs cant be met via pumping the gas to the Ukainian nazi reich directly which Russia is currently doing via 5D judo. After the US bombed Nord Stream they thought Russia wouldn't be able to supply the degenerate West with enough discounted oil to keep the lights on for drag queen story hour but like always Nabiullina and Putin were 5 steps ahead. Enter the plan of sending the oil at an even bigger discount to India in exchange for a mountain of Rupees.
Russia has proven yet again that no matter how many Russians you blow up in Donbass, no matter how many drone attacks you launch on Russia proper they will find a way to get you all the gas you need to launch a successful offensive against Russias newest regions!!! Only BRICS can deliver like this! They will get you your merchandise even if it kills them!!
Never in the history of the world has there been such an end user focused approach to business. Who else will literally find a way around your own sanctions to bring you the energy you need and all at net less for themselves? Anyway the project hasnt actually been cancelled, its just that Sberbank hasn't figured out how to convert rupees into digital rubbles yet. Russians have no need for gold or currencies that can be used in international trade. What normal Russians are demanding is digital currencies with expiration dates and a limited selection of products they can be exchanged for. But once the rupees can be accordingly converted the program will back with even more multipolar vigor!