Archive · 18 Aug 2025
India's Oil Trade: Suppliers Hesitant to Use Rupees
India buys a lot of oil from other countries.
The government wants to pay for this oil using Indian money (rupees), but the companies selling the oil don't want to.
This is because India doesn't sell as much to other countries as it buys from them.
A group in the government is now asking for everyone involved to find a way to use rupees for these oil payments.
Even though there was an effort to do this with Russia, it hasn't worked as well as planned.
They are also working on storing more oil to make sure there's enough.
Oil suppliers are hesitant to accept Indian rupees for crude oil due to India's trade imbalance.
The Indian government is trying to promote rupee-denominated oil trade.
A rupee settlement mechanism launched in 2022 has not gained traction.
The parliamentary committee wants the Oil Ministry to coordinate with the Finance Ministry and RBI.
India's crude oil import bill rose to $137 billion in FY25.
- Who
- Parliamentary Standing Committee on Petroleum and Natural Gas and the Oil Ministry.
- What
- Hesitancy of oil suppliers to accept Indian rupees for crude oil imports.
- When
- Memorandum of understanding signed on July 15, 2023. Report considered recently.
- Where
- India
- Why
- To address the slow adoption of rupee-denominated oil trade and promote its use.
Parliamentary Committee
Oil Ministry
Rupee Settlement
Parliamentary Committee
Wants to promote Rupee settlement for crude oil imports
Oil Ministry
Ministry of Finance and RBI need to take action to address the bottlenecks.
- FY25 Crude Import Bill
- $137.0 billion
- FY24 Crude Import Bill
- $133.4 billion
- RBI and CBUAE MoU
- July 15, 2023
- First Rupee Payment by IOC
- August 14, 2023
- SPR Facilities Capacity
- 5.33 million metric tons