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India's gold and silver imports from its free trade agreement (FTA) partner UAE have skyrocketed 210 per cent to USD 10.7 billion in 2023-24 and there is a need to potentially revise the concessional customs duty rates under the pact to mitigate the arbitrage driving this surge, a report said on Monday. Economic think tank Global Trade Research Initiative (<keyword id="15910220" type="General" weightage="20" keywordseo="GTRI" source="Orion">GTRI</keyword>) said this sharp rise in gold and silver imports is primarily driven by import duty concessions granted by India to the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). India allows 7 per cent tariffs or customs duty concessions on import of unlimited quantities of silver and a 1 per cent concession on 160 metric tonnes of gold. CEPA was signed in February 2022 and implemented in May 2022. Additionally, India facilitates gold and silver imports by allowing private firms to import from the UAE through the India International Bullion Exchange (IIBX) in Gift City. Previously, only authorised agencies could handle such imports, the report said. "While India's total imports from the UAE fell 9.8 per cent from USD 53.2 billion in FY23 to USD 48 billion in FY24, imports of gold and silver skyrocketed 210 per cent, from USD 3.5 billion to USD 10.7 billion," it said. "Import of all remaining products fell 25 per cent, from USD 49.7 billion in FY23 to USD 37.3 billion in FY24," it said. GTRI Founder Ajay Srivastava said the current import of gold and silver from the UAE is unsustainable as the UAE does not mine gold or silver or add sufficient value to imports. "High import duties in India on gold, silver, and jewellery at 15 per cent are at the root of the problem. Consider lowering tariffs to 5 per cent. This will cut large-scale smuggling and other misuse," Srivastava said. Trade in gold, silver, and diamonds has been prone to misuse due to their low volume but high value and high import duties in India. Low tariff imports of gold, silver only benefit few importers who keep all profits arising through tariff arbitrage and never pass it to consumers, he said. Srivastava suggested the government implement certain measures to help India balance its <keyword id="21681862" type="General" weightage="20" keywordseo="trade-policies" source="keywords">trade policies</keyword>, protect domestic revenue, and ensure fair competition in the import of precious metals and jewellery. It suggested reassessing and potentially revising the concessional duty rates under CEPA to mitigate the arbitrage driving the surge in imports of gold and silver. "At least, implement yearly import quotas (tariff rate quotas) for silver, similar to those for gold, to control the volume of imports and prevent revenue loss," it said, adding that India should rigorously verify the claimed value addition by Dubai-based refiners in gold and silver imports to ensure compliance with CEPA rules of origin. It also asked to tighten regulations around the India International Bullion Exchange (IIBX) at Gift City to control the volume and nature of <keyword id="22080399" type="General" weightage="20" keywordseo="precious-metal-imports" source="keywords">precious metal imports</keyword> and the exchange should not allow country-based exemptions. As increased imports contribute to a higher current account deficit and since gold and silver act more like financial instruments than regular trade items, India should avoid including them in any FTA. "India has granted <keyword id="20542001" type="General" weightage="20" keywordseo="tariff-concessions" source="keywords">tariff concessions</keyword> for these items in many FTAs and under the DFTP (duty-free tariff preference) scheme, so a comprehensive review is needed. India announced the scheme for LDCs (least developed countries) in 2008. Under this, India provides duty free/preferential market access on about 98.2 per cent of India's tariff lines (or product categories). Further, the report stated that silver imports from the UAE increased multifold to USD 1.74 billion in 2023-24 from a meagre USD 29.2 million in 2022-23 due to India charging an 8 per cent duty under the CEPA versus a 15 per cent duty from other countries. "The large 7 per cent tariff arbitrage resulted in a loss of revenue for India of Rs 1,010 crore in FY24. Revenue loss will increase as India has committed to make tariffs zero on unlimited quantities of silver from the UAE within next 8 years," it added. It said this trade is unusual because the UAE just imports large silver and gold bars, melt and convert these into silver grains and unwrought gold for exports. "A check with global refiners will show that value addition in such process is much less than 1 per cent as opposed to 3 per cent required under the FTA," it said. On gold bars, the report said India agreed to import 200 metric tons of gold annually from the UAE with a 1 per cent tariff concession and due to this gold imports rose 147.6 per cent from USD 3 billion in FY23 to USD 7.6 billion in FY24, causing India to lose Rs 635 crore in revenue in FY24. Similarly, India's jewellery imports have increased 187.6 per cent from USD 1.1 billion in FY23 to USD 3.3 billion in FY24, whereas these imports from the UAE have increased 290 per cent from USD 347 million in FY23 to USD 1.35 billion in the last fiscal.

Gold, silver import from UAE surged 210% in 2023-24; Need duty revision in FTA: GTRI

India’s diamond industry is grappling with a severe downturn as both imports and exports have significantly declined over the past three years, triggering defaults, <keyword id="23043782" type="General" weightage="20" keywordseo="factory-closures" source="keywords">factory closures</keyword>, and widespread <keyword id="20013745" type="General" weightage="20" keywordseo="job-losses" source="keywords">job losses</keyword>, according to a report by the Global Trade Research Initiative (<keyword id="19962754" type="General" weightage="20" keywordseo="GTRI" source="keywords" meta.keywordsubtype="org" meta.entityname="GTRI" meta.hostid="261" meta.entityid="GTRI">GTRI</keyword>). The think tank highlighted that the sector is struggling with unsold <keyword id="20237406" type="General" weightage="20" keywordseo="rough-diamonds" source="keywords">rough diamonds</keyword> and increasing competition from lab-grown alternatives. Ajay Srivastava, Founder of GTRI, pointed out that the downturn in India’s diamond industry has had devastating effects. "This has led to defaults, factory closures, and widespread job losses. Tragically, more than 60 individuals from Gujarat’s diamond sector have taken their own lives, highlighting the intense financial and emotional stress," Srivastava said. He emphasised the urgent need for intervention to address these issues and ensure the survival of the sector. <h2>Declining imports and exports</h2>Data from GTRI paints a grim picture of the industry. Imports of rough diamonds have dropped by 24.5%, from USD 18.5 billion in 2021-22 to USD 14 billion in 2023-24, reflecting weakened global demand and fewer orders for diamond processing. After accounting for re-exported rough diamonds, net imports saw a 25.3% decrease, signalling reduced interest in processing diamonds in India. The situation is even worse on the export front. Exports of cut and polished diamonds fell by 34.6%, from USD 24.4 billion in FY 2022 to USD 13.1 billion in FY 2024. Net exports experienced an even sharper decline, dropping by 45.3% from USD 15.9 billion to USD 8.7 billion, indicating a weak global market and rising inventories of unsold diamonds. <h2>Rising inventories and market competition</h2>The report also highlighted that the percentage of unsold diamonds returned to India increased from 35% to 45.6% during this period. Additionally, the gap between net rough diamond imports and net exports of cut and polished diamonds widened from USD 1.6 billion in FY 2022 to USD 4.4 billion in FY 2024, signifying a growing stockpile of unsold inventory and insufficient export demand. Several factors contribute to this crisis. Global economic uncertainty, inflation, and geopolitical tensions — particularly in key markets like the US, China, and Europe — have led to decreased spending on luxury items such as diamonds. Fluctuating global diamond prices have added to this uncertainty, causing buyers to hesitate in purchasing rough diamonds. <div type="Article" hostid="261" msid="113445065" title="&amp;#39;The pressure became too much for her&amp;#39;: Mother blames &amp;#39;work stress&amp;#39; for 26-year-old EY employee&amp;#39;s death" mstype="2" mssubtype="0"></div>Moreover, the Russia-Ukraine conflict has disrupted the global diamond supply chain, with sanctions on Russia, a major producer of rough diamonds, further complicating trade. This slowdown has impacted the global market, stalling the flow of diamonds and affecting India’s processing sector. Another challenge facing the industry is the shift in consumer preferences toward <keyword id="20662742" type="General" weightage="20" keywordseo="lab-grown-diamonds" source="keywords">lab-grown diamonds</keyword>, which are seen as more affordable, ethical, and sustainable. This shift is particularly evident in markets where customers are becoming more conscious of the environmental and ethical implications of their purchases. <h2>Internal regulatory and operational hurdles</h2>Internally, the Indian diamond sector is facing a host of challenges. Many polishing units are burdened with unsold inventories of polished diamonds, discouraging them from importing new rough diamonds. Rising operational costs, including labour, energy, and materials, have also made it difficult for many polishing units to remain profitable. These factors have led to the closure of many shops and significant layoffs, particularly in Surat, the world’s largest hub for diamond cutting and polishing. The sector's heavy reliance on financing has also become a problem. Tighter credit conditions and reduced lending from banks have made it increasingly difficult for businesses to purchase rough diamonds, further stalling production. Additionally, a significant number of cut and polished diamonds exported from India are being returned due to quality issues, overstocking, and price fluctuations, creating costly delays and adding to the strain on exporters. <h2>Dubai's rising influence</h2>An interesting development highlighted by GTRI is the increasing share of rough diamond imports from Dubai, which does not produce diamonds itself. Instead, Dubai imports diamonds from countries like Botswana, Angola, South Africa, and Russia and re-exports them to India. Dubai’s share in India’s rough diamond imports surged from 36.3% in FY 2020 to 60.8% in FY 2024, further rising to 64.5% in April-June 2024. In contrast, Belgium’s share of these imports fell from 37.9% in FY 2020 to 17.6% in FY 2024. One major reason for Dubai's increasing role is India’s high corporate tax regime, which pushes foreign suppliers of rough diamonds to re-export their diamonds to Dubai before sending them to India. This has rendered India’s Special Notified Zones (SNZs) in Mumbai and Surat largely ineffective. <h2>Revitalising the sector</h2>To help revitalise the struggling sector, GTRI has proposed several measures. These include extending export credit terms, exempting foreign rough diamond sellers from corporate taxes in India, regulating the lab-grown diamond industry, and reconsidering the zero-tariff import of cut and polished diamonds from Dubai under the India-UAE trade agreement. The think tank also suggested that the Reserve Bank of India (RBI) extend the export credit period for cut and polished diamond exporters from six months to 12 months, as buyers are increasingly demanding longer credit terms. India’s strong foreign exchange reserves make this feasible. <div type="Article" hostid="261" msid="113449316" title="Small businesses generated 35 million job applications till Aug 2024, 14 million were from women: Report" mstype="2" mssubtype="0"></div>The Indian diamond industry, which consists of over 7,000 companies — many of them small or medium enterprises — provides direct employment to about 1.3 million workers, with Surat alone employing nearly 8,00,000 people. The industry is also crucial for millions of indirect jobs in sectors like logistics, transport, and retail. With the sector being such a vital part of India’s economy, immediate and coordinated efforts are needed to address its current challenges and ensure its long-term viability. (With inputs from PTI)

India's diamond sector faces major crisis amid plummeting imports, exports, and massive job losses

Boost in domestic <keyword id="19914449" type="General" weightage="20" keywordseo="manufacturing" source="keywords">manufacturing</keyword> due to PLI (production linked incentive) schemes and increase in <keyword id="19916774" type="General" weightage="20" keywordseo="exports" source="keywords">exports</keyword> on account of free trade agreements are expected to bridge the country's <keyword id="20201391" type="General" weightage="20" keywordseo="trade-deficit" source="keywords">trade deficit</keyword> further, <keyword id="20613906" type="General" weightage="100" keywordseo="Economic-Survey" source="keywords">Economic Survey</keyword> said on Monday. However, it said that fluctuations in <keyword id="19936629" type="General" weightage="20" keywordseo="commodity-prices" source="keywords">commodity prices</keyword>, especially for critical imports like oil, metals, and agricultural products, can impact India's trade balance and inflation levels. The Survey said that though ongoing geopolitical headwinds impacted India's merchandise exports, lowering international commodity prices ensured a lower trade deficit in FY24 than in FY23. The country's merchandise trade deficit narrowed to USD 240 billion in 2023-24 from USD 265 billion in 2022-23. It added that changes in trade policies by major trading partners or geopolitical developments can affect India's export opportunities and market access. "In the coming years, India's trade deficit is expected to decline further as the <keyword id="19981334" type="General" weightage="20" keywordseo="PLI-scheme" source="keywords">PLI scheme</keyword> is expanded and India creates a globally competitive manufacturing base in several product categories," the Survey said. It added that the recently signed FTAs (free trade agreements) are expected to increase the <keyword id="22374533" type="General" weightage="20" keywordseo="global-market-share" source="keywords">global market share</keyword> of the country's exports. The PLI scheme for sectors like mobile manufacturing, information technology (IT) hardware, pharmaceutical, telecommunications, and food product are helping to increase manufacturing and cut imports. India has implemented <keyword id="20000557" type="General" weightage="20" keywordseo="FTA" source="keywords">FTA</keyword> with Mauritius, Australia and the UAE. It added that a narrowing merchandise trade deficit and rising service exports have improved the CAD (<keyword id="20054874" type="General" weightage="20" keywordseo="current-account-deficit" source="keywords">current account deficit</keyword>), ending with a surplus of 0.6 per cent of GDP in Q4 of FY24. However, the risks to the performance of India's external sector are on the downside due to the persistence of current <keyword id="19955176" type="General" weightage="20" keywordseo="geopolitical-tensions" source="keywords">geopolitical tensions</keyword> and policy uncertainty, it said. Some of the challenges listed by the survey includes fall in demand from major trading partners like the US, rise in trade cost, and volatility in commodity prices. Attacks on shipping in the Red Sea and drought in the Panama Canal have resulted in trade flows being re-routed, increasing journey time and costs. India's merchandise trade relies heavily on maritime trade, so disturbances in major shipping routes can impact its economy. "It is critical to explore what these changing paradigms mean for India. Policies need to be a mix that straddles security concerns with economic considerations," the survey said, adding India's push towards manufacturing in complex and niche sectors through schemes such as PLI and Make in India aims to balance these goals. Further, the survey emphasised on the need to focus on improving India's competitiveness in many product areas. For example, it said, India has tremendous potential in becoming a large global exporter in agricultural commodities. Fostering stronger regional trade ties and adding more markets for Indian goods will help mitigate global demand fluctuations. "In an era when global economic growth is likely to be buffeted by geopolitical tensions and protectionism, growing India's exports of goods and services will be a stiffer challenge than before," it cautioned. Commenting on this, Rumki Majumdar, Economist, Deloitte India, said that despite global uncertainties, India's exports are recording positive growth rates. "That shows the resilience of our exports amidst global uncertainties," she said, adding, "by transforming our export basket and focusing on higher margins and value addition across various sectors, India will easily achieve its ambition of USD 2 trillion in exports by 2030-31."

India's trade deficit expected to decline further: Economic Survey

As <keyword id="19895063" type="General" weightage="20" keywordseo="India" source="keywords">India</keyword>'s <keyword id="19916774" type="General" weightage="100" keywordseo="exports" source="keywords">exports</keyword> in the first quarter of 2024-25 (April-June) crossed the $200 billion mark, the government has expressed its optimism about reaching its full-year target of $800 billion. "We are quite optimistic and it gives us optimism that we'd be crossing our <keyword id="19944038" type="General" weightage="20" keywordseo="USD" source="keywords">USD</keyword> 800 billion of trade this year," Commerce Secretary Sunil Barthwal said on Monday while releasing India's trade data for June. India's overall exports, merchandise and services combined in the month of June were to the tune of $65.47 billion, a 5.4% rise on a yearly basis, commerce ministry data showed. Same month last year it was at $62.12 billion. In break up, <keyword id="22419320" type="General" weightage="20" keywordseo="exports-of-merchandise-goods" source="Orion">exports of merchandise goods</keyword> rose from $34.32 billion to $35.20 billion, and exports of services rose from $27.79 to $30.27 billion. In May, merchandise and services exports combined were to the tune of $68.29 billion, a 10.2% rise on a yearly basis. The country's <keyword id="19933566" type="General" weightage="20" keywordseo="imports" source="keywords">imports</keyword> too increased year-on-year in June, data showed today. The same was the case in May. The overall imports, both merchandise and services combined, increased from $69.12 billion to $73.47 billion, a rise of about 6.3%, in June. In the recently concluded financial year 2023-24, India registered record exports at $778 billion. In 2022-23, the country exported goods and services combined at $776.3 billion. In break up, services exports rose from $325.3 billion to $341.1 billion in 2023-24. Merchandise exports though marginally declined from $451.1 billion to $437.1 billion. Among various steps the government took was to launch a <keyword id="8870884" type="General" weightage="20" keywordseo="Production-Linked-Incentive" source="Orion">Production Linked Incentive</keyword> (PLI) scheme in varied sectors, including electronic goods, to make Indian manufacturers globally competitive, attract investments, enhance exports, integrate India into the global supply chain and reduce dependency on imports. These seemed to have reaped dividends. China, Russia, Iraq, <keyword id="19908927" type="General" weightage="20" keywordseo="uae" source="keywords">UAE</keyword>, and Singapore were among the countries where India's exports in the just-concluded financial year have risen substantially, though with a low base. The other countries in the Top 10 list are the UK, Australia, Saudi Arabia, the Netherlands, and <keyword id="19899437" type="General" weightage="20" keywordseo="south-africa" source="keywords">South Africa</keyword>. Overall imports declined from $898.0 billion in 2022-23 to $853.8 billion. Both merchandise and services exports declined during the financial year. Overall trade deficit significantly improved from $121.6 billion in 2022-23 to $75.6 billion in 2023-24.

India's Apr-Jun quarter exports cross $200 bln, government optimistic of reaching  $800 bln annual target

India has signed mutual recognition agreements (MRAs) with <keyword id="551085" type="General" weightage="20" keywordseo="customs-authorities" source="Orion">customs authorities</keyword> of seven nations and is actively pursuing negotiations for such pacts with other countries, a top official said. The Central Board of Indirect Taxes and Customs and the Federal Customs Service, Russia, this month signed the Authorised Economic Operator (AEO) MRA to provide reciprocal benefits to accredited and trusted exporters of both signatories in the clearance of goods by the customs authorities of the importing country. "The CBIC and the Federal Customs Service, Russia signed the <keyword id="21760232" type="General" weightage="20" keywordseo="Authorized-Economic-Operator" source="keywords">Authorized Economic Operator</keyword> (AEO) Mutual Recognition Agreement, which is a major <keyword id="20467509" type="General" weightage="20" keywordseo="trade-facilitation" source="keywords">trade facilitation</keyword> boost for Indian importers and exporters. While this is the 7th MRA that has been signed by <keyword id="20001024" type="General" weightage="20" keywordseo="indian-customs" source="keywords">Indian Customs</keyword>, negotiations are being actively pursued with many other Customs' administrations," CBIC Chairman <keyword id="159142" type="General" weightage="20" keywordseo="Sanjay-Kumar-Agarwal" source="Orion">Sanjay Kumar Agarwal</keyword> said in a communication to field formation. The AEO programme enables Customs administration to identify safe and compliant exporters and importers and to provide them with better facilitation. AEO MRA is already in place for seven countries, including Korea, UAE, Hong Kong and Taiwan.

India signs customs mutual recognition agreements with seven nations; Actively pursuing more, says CBIC chief

<ul class="summary-list"><li>India's central bank is asking lenders to promote local currencies when trading with the UAE, Reuters reported.</li><li>The idea is to reduce the outflow of US dollars and help globalize the rupee.</li></ul>The Reserve Bank of India urged lenders to ask clients to settle transactions in the rupee or dirham when trading with the United Arab Emirates, instead of the US dollar, sources told <a href="https://www.nasdaq.com/articles/exclusive-india-cenbank-nudges-banks-to-settle-uae-trades-in-rupee-dirham-sources" target="_blank" rel="noopener">Reuters</a>.The central bank hopes to stem India's outflow of greenbacks and help promote the rupee internationally, according to the report. A central bank official delivered the message to foreign exchange dealers during a seminar this month, Reuters said.As the dollar is the primary currency used in international trade, especially for commodities, India's $21.62 billion trade deficit with the UAE drains its supply of dollars. The request from the central bank comes as India and the UAE have set themselves on a de-dollarization path.The two countries signed a non-dollar trade agreement in July. And earlier this month, India purchased <a href="https://markets.businessinsider.com/news/currencies/dedollarization-dollar-war-india-uae-currency-crude-oil-trade-markets-2023-8?_gl=1*ebidoh*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTY5MjYxODYzMi4yMjUuMS4xNjkyNjIxNDA3LjYwLjAuMA..">1 million barrels of oil</a> from the Abu Dhabi National Oil Company using rupees. But larger private-sector companies are reluctant to use dirhams due to the low volume of the current rupee-dirham trade, sources told Reuters. Meanwhile, banks are also offering smaller companies discounted service charges to incentivize local currency transactions.De-dollarization rhetoric has been rising globally ever since Russia's invasion of Ukraine last year. As the war initiated Moscow's exclusion from the dollar-denominated payments system, Russia began accepting local currencies in its international trade, such as selling <a href="https://www.businessinsider.com/dedollarization-russia-dollar-yuan-billions-india-struggle-use-ruble-2023-6">oil for Indian rupees</a>. In addition, the BRICS bloc —Brazil, Russia, India, China and South Africa — seeks to create their own shared currency, though economist Jim O'Neill, who first coined the BRIC term, <a href="https://markets.businessinsider.com/news/currencies/dedollarization-us-dollar-outlook-currencies-forex-market-brics-common-currency-2023-8#:~:text=Dedollarization%20is%20the%20latest%20buzzword,the%20use%20of%20other%20currencies">called the idea ridiculous</a>. At the same time, individual efforts to lessen dollar dependence are facing a <a href="https://markets.businessinsider.com/news/currencies/dedollarization-confidence-crisis-dollar-yuan-ruble-peso-currencies-crash-2023-8">credibility crisis</a>, as the <a href="https://markets.businessinsider.com/news/currencies/china-economy-dollar-vs-yuan-renminbi-growth-deflation-xi-jinping-2023-8?utm_medium=ingest&amp;utm_source=markets">Chinese yuan</a> and <a href="https://markets.businessinsider.com/news/currencies/russia-ruble-vs-dollar-currency-crash-central-bank-rate-hike-2023-8?utm_medium=ingest&amp;utm_source=markets">Russian ruble</a> have fallen sharply against the dollar in recent months.

India's central bank urges lenders to de-dollarize trade with the UAE using local currencies

<ul class="summary-list"><li>New US sanctions on Russia may make its oil trade with India more difficult, sources told Reuters.</li><li>The curbs will add to freight costs, diminishing the discount Moscow can offer on its crude oil.</li></ul>Washington's latest sanctions on Moscow are sparking grimmer outlooks for Russia's energy trade with India, sources told <a href="https://www.reuters.com/business/energy/new-sanctions-threaten-russian-oil-sales-india-2024-02-28/" target="_blank" rel="noopener">Reuters</a>. The three anonymous industry sources outlined growing concern among Indian refineries about the new restrictions. Institutions worry that it may become harder to find vessels to transport Russian crude, as well as adding to freight costs. Such factors could eventually shrink the discount on Russian oil, diminishing the appeal of the trade. Cheaper barrels were a key reason India became the biggest buyer of Russian seaborne crude last year, importing 1.66 million barrels per day in 2023.Though sanctions are nothing new to Moscow since its 2022 invasion of Ukraine, the US applied an extensive batch last Friday, marking the war's second anniversary and penalizing Russia for the <a href="https://www.businessinsider.com/photos-life-career-of-putin-critic-alexei-navalny-2023-9">death of Alexei Navalny</a>, an preeminent opposition leader in the country.Among targets was Russia's leading tanker firm, Sovcomflot, on accusations that it violates the Group of Seven's $60-a-barrel price cap on Russian crude. 14 tankers tied to the group were also targeted, adding to a growing list of <a href="https://markets.businessinsider.com/news/commodities/russia-sanction-oil-tankers-shadow-fleet-crude-exports-price-cap-2024-2">sanctioned vessels</a>.While the price cap was introduced in December 2022, the US and its allies have taken to <a href="https://markets.businessinsider.com/news/commodities/russia-shadow-fleet-oil-tankers-sanctions-ukraine-enforcement-price-cap2024-2">stricter enforcement</a> in recent months.As Indian state refineries negotiate the next annual deal with Russia's Rosneft company, they're already seeing a thinner discount, sources told Reuters. Under current terms, Rosneft offers an $8 to $9 discount per barrel to Dubai prices. But it has limited its offer to a $3 to $3.50 discount for the future term.Indian oil companies are primarily <a href="https://markets.businessinsider.com/news/commodities/crude-oil-prices-india-russia-trade-geopolitics-opec-supply-puri-2024-2">focused on securing the cheapest crude available</a>, the country's Minister of Petroleum and Natural Gas Hardeep Singh Puri previously said. It's why flows from the Middle East, its traditional source of energy exports, hit a record low last year.Separately, however, he's noted that Indian trade will shift away from Russia if sanctions are violated. This occurred in January, further incentivized by Saudi Arabia's own discount on exports."When Russian prices don't conform, we buy from Iraq, the UAE, Saudi Arabia," <a href="https://markets.businessinsider.com/news/commodities/india-mideast-russian-crude-exports-discounts-sanctions-price-cap-puri-2024-1?utm_medium=ingest&amp;utm_source=markets">Puri then said</a>.Apart from straining the energy trade, a harder line from Washington is taking a toll on Russia elsewhere. Deputy Treasury Secretary Wally Adeyemo recently cited that <a href="https://markets.businessinsider.com/news/currencies/russia-financial-flows-sanctions-us-dollar-access-treasury-ukraine-war-2024-2">financial flows to Moscow have withered</a>, as global institutions fear losing access to the dollar.

Russia’s energy trade with India could be strained amid fresh sanctions, report says

<keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword> and <keyword id="6358356" type="General" weightage="100" keywordseo="uae" source="Orion">UAE</keyword> are in talks for a Rupee-Dirham-denominated bilateral trade, said <keyword id="3786584" type="General" weightage="50" keywordseo="sunjay-sudhir" source="Orion">Sunjay Sudhir</keyword>, Indian Ambassador to UAE, adding that both the countries will find it beneficial. The Ambassador said the talks started on September 1, 2022. "Both countries find this beneficial. India has shared a concept paper with UAE. Central Banks of both countries are discussing. The objective is to reduce the transaction cost," the Indian Ambassador to UAE said. This development followed the Reserve Bank of India's (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>) announcement -- a mechanism to settle payments for international trade in rupees, especially for India's exports. It is widely believed if the mechanism fructifies then it may go a long way in internationalizing the Indian currency rupee in the long run. A currency can be termed "international" if it is widely accepted worldwide as a medium of exchange. <keyword id="2017241" type="General" weightage="50" keywordseo="sbi-research" source="Orion">SBI Research</keyword>, in a report in early July, said, an interesting development is taking place in the global currency market as there has been a significant jump in trade in oil and other commodities in currencies such as the Renminbi, Hong Kong Dollar, and Arab Emirates Dirham. In the report, SBI Research said the Reserve Bank of India (RBI) should make a conscious effort to internationalise the Indian currency rupee amid disruptions in payments caused by the ongoing Russia-Ukraine war. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/retail-inflationary-pressures-expected-to-ease-with-fresh-kharif-arrivals-finance-ministry/articleshow/95760372.cms">Retail inflationary pressures expected to ease with fresh Kharif arrivals: Finance Ministry</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-8-paise-higher-to-close-at-81-62-against-us-dollar/articleshow/95765322.cms">Rupee 8 paise higher to close at 81.62 against US dollar</a>

India, UAE in talks for rupee-dirham denominated bilateral trade

<ul class="summary-list"><li>Russia passed a bill allowing crypto trade payments and is aiming to roll out the digital ruble next July.</li><li>Moscow's tilt to crypto reverses its previous anti-crypto stance.</li></ul>Russia is stepping up sanctions-evading measures to keep its international trade flowing. The country is passing new laws regulating cryptocurrency and a plan for the digital ruble.On Tuesday, Russia's State Duma — the lower house of Russia's federal assembly — passed a bill that would let businesses use cryptocurrencies in international trade, <a target="_blank" class="" href="https://www.reuters.com/technology/russia-launch-international-payments-crypto-before-end-2024-2024-07-30/">Reuters</a> reported.Under this new law, Russia's central bank will create a new "experimental" payments platform. Russian central bank governor Elvira Nabiullina said the first transactions are expected by the end of this year, per Reuters.Nabiullina also said on Tuesday that the Russian central bank plans a mass introduction of the digital ruble in July next year, per <a target="_blank" class="" href="https://tass.com/economy/1823089">TASS.</a>Digital currencies, like the digital ruble, are similar to cryptocurrencies but are <a target="_blank" rel=" nofollow" href="https://www.weforum.org/agenda/2023/11/cbdcs-how-different-cryptocurrency-stablecoin/">issued and backed by central banks.</a><h2 id="04f69842-16d5-468a-85c4-9bbe54193e49">Some Russian businesses are already using crypto</h2>In addition, Russia passed new regulations legalizing crypto mining on Tuesday.An existing ban on crypto payments in Russia remains, but Moscow's greenlighting crypto for international trade marks a significant shift.In January 2022 — before the full-scale invasion of Ukraine — <a target="_blank" class="" href="https://www.reuters.com/business/finance/russian-cbank-proposes-banning-cryptocurrencies-crypto-mining-2022-01-20/">Russia's central bank</a> proposed a ban on the use and mining of cryptocurrencies within the country, citing risks to financial stability and monetary policy.However, the heavily sanctioned country is facing so many issues with international payments that it has been forced to shift its position.Some Russian businesses are already using cryptocurrencies to trade with settlements done via Hong Kong, but through central Asian intermediaries, <a target="_blank" rel=" nofollow" class="" href="https://www.bloomberg.com/news/articles/2024-07-25/russian-companies-face-mounting-payment-issues-as-sanctions-bite">Bloomberg</a> reported last week.<a target="_blank" class="" href="http://www.kremlin.ru/events/president/news/74566">Russian President Vladimir Putin</a> himself said earlier this month that Russia had to <a target="_blank" class="" href="https://tass.com/economy/1818055">"seize the moment"</a> to create a legal framework for digital assets, as they are being increasingly used to settle international payments.Russia's tilt toward crypto isn't unexpected. Analysts have been speculating about how <a target="_blank" href="https://www.csis.org/analysis/cryptocurrencies-and-us-sanctions-evasion-implications-russia">Russia would eventually move</a> toward using crypto and digital assets following sweeping sanctions over its invasion of Ukraine.<h2 id="0eca508c-15cf-41aa-b85a-a557ee507d8d">Increasingly tight Western sanctions hit Russia's international trade</h2>Until recently, Moscow hasn't really had to look into digital currencies that intently — since Russian companies have managed to keep on doing business using non-US dollar currencies, such as the Chinese yuan, or via smaller banks.But Russia's international trade is getting <a target="_blank" class="" href="https://www.businessinsider.com/russia-economy-china-yuan-payments-delay-months-bounce-back-sanctions-2024-7">ever more difficult.</a>The troubles started in December when the US authorized <a target="_blank" rel=" nofollow" href="https://www.reuters.com/world/us/us-takes-aim-financial-institutions-with-new-russia-sanctions-authority-2023-12-22/">secondary sanctions</a> targeting financial institutions that help Russia skirt sanctions.This prompted <a target="_blank" rel="" class="" href="https://www.businessinsider.com/russia-economy-financial-system-us-sanctions-oil-trade-foreign-banks-2024-3">global banks</a> from <a target="_blank" rel="" class="" href="https://www.businessinsider.com/china-biggest-banks-stop-russia-payments-icbc-ccb-boc-2024-2">China </a>to the UAE, Turkey, and Austria to reduce transactions — even in non-US dollars — with Russia to avoid getting in the crosshairs."This episode demonstrates the global power of the US Treasury, causing banks from Turkey to India and China to pause the processing of payments invoiced by or to Russian counterparties," wrote Christopher Granville, the managing director of global political research at GlobalData TS Lombard, in a May note about <a target="_blank" class="" href="https://www.businessinsider.com/dedollarization-brics-usd-dollar-central-banks-digital-currency-payments-mbridge-2024-5">digital currencies and dedollarization.</a>"In other words, simply settling commercial invoices in national currencies rather than US dollars turns out to be an insufficient counter to US sanctions," Granville added.The payment issues were exacerbated last month when the US Treasury rolled out a new package of <a target="_blank" rel="" href="https://www.businessinsider.com/russia-sanctions-us-china-ukraine-war-economy-janet-yellen-treasury-2024-6?utm_medium=ingest&amp;utm_source=markets&amp;_gl=1*1nuxsvd*_ga*MTM0MjM1NDU5My4xNjg1MTUzMTcw*_ga_E21CV80ZCZ*MTcyMDE0NzM3MS45MzUuMS4xNzIwMTQ5OTU5LjYwLjAuMA..">expansive US sanctions</a> against Russia, forcing the Moscow Exchange — Russia's key bourse — to halt <a target="_blank" rel="" href="https://markets.businessinsider.com/news/currencies/russia-dollar-ruble-exchange-us-sanctions-currency-yuan-ukraine-war-2024-6">dollar and euro trade.</a><h2 id="b33701e6-83ac-4290-b6c2-ada7fbc1bf3a">Russia could be eying a digital-currency-based settlement system</h2>It isn't clear how Russia's crypto and digital currency regimes will shape up.Implementation may be easier said than done.Even China, which has one of the world's most advanced <a target="_blank" class="" href="https://www.scmp.com/tech/tech-trends/article/3228094/chinas-digital-currency-bank-china-helps-mainland-tourists-spend-e-cny-hong-kong-select-retailers">digital currencies,</a> relies on a "two-tier" system involving banks as wallet-holding agents. Granville wrote in May that that setup avoided excessively disrupting the operations of banks, which could threaten broader financial stability.

Sanctions-hit Russia is rushing to set up payment systems, including crypto, to make trading easier

<ul class="summary-list"><li>Global crude would hit $150 if India bought more from the Middle East than from Russia, Hardeep Singh Puri told CNBC.</li><li>"The world is grateful to India for buying Russia's oil," the petroleum and natural gas minister said. </li></ul>Inflows of Russian crude into India are keeping global oil prices from surging, India's Minister of Petroleum and Natural Gas said."If India, instead of buying Russian oil, we start buying more of the Middle Eastern oil, oil prices will not be at $75 or $76; it will be $150," Hardeep Singh Puri told <a href="https://www.cnbc.com/2024/02/08/india-buying-russian-oil-keeps-prices-cheaper-says-oil-minister-puri.html" target="_blank" rel="noopener">CNBC</a> during the India Energy Week conference. He pushed back on criticism that the country's continued trade with Russia supports Moscow's war in Ukraine, noting that Indian oil companies will snap up the cheapest crude available, with no attention paid to politics.That's likely why discounted Russian barrels made up an <a href="https://www.reuters.com/markets/commodities/cheap-russian-oil-cuts-opecs-share-india-imports-record-low-50-2024-01-18/" target="_blank" rel="noopener">all-time high</a> among India's crude imports last year, while flows from the Middle East, a traditional source of trade, hit a record low."The world is grateful to India for buying Russia's oil," Puri noted. Wild price swings defined crude markets in the latter half of 2023, as production cuts from the OPEC coalition <a href="https://africa.businessinsider.com/markets/oil-prices-at-dollar100-a-barrel-look-too-high-for-global-demand-to-sustain/t1qzqy0" target="_blank" rel="noopener">fueled fears</a> that oil prices would eventually breach triple digits. The Israel-Hamas war only added to tensions, while attacks on Red Sea shipping lanes added pressure to the oil trade.But the US' <a href="https://markets.businessinsider.com/news/commodities/us-oil-production-record-brent-crude-prices-opec-russia-saudi-2023-12">blowout crude production</a> last year has kept prices from rising, dampened further by falling demand and China's economic slowdown. In fact, economists have suggested that geopolitical turmoil is the only factor supporting current price levels — crude would otherwise stand at an <a href="https://markets.businessinsider.com/news/commodities/oil-price-outlook-opec-china-red-sea-shipping-crude-supply-2024-2?_gl=1*4w47cj*_ga*MTMxNDIwNDI1Ni4xNjc1Njg3OTU4*_ga_E21CV80ZCZ*MTcwNzQxMTE0MC4xMDUuMS4xNzA3NDExNjI0LjI1LjAuMA..">estimated $70</a>.Although Puri dismissed the political undertones of trading with Russia, Western measures against Moscow have had some impact on India's imports. After <a href="https://markets.businessinsider.com/news/commodities/india-mideast-russian-crude-exports-discounts-sanctions-price-cap-puri-2024-1">Indian refineries took on larger inflows</a> of Saudi oil in January, the minister blamed it on Moscow's failure to comply with the $60 price cap on its exports. The sanction was placed on Russia after its invasion of Ukraine."When Russian prices don't conform, we buy from Iraq, the UAE, Saudi Arabia," Puri said at the time.

Oil prices would double if India didn't trade with Russia, energy minister says

At the invitation of Russian President <keyword id="19900702" type="General" weightage="20" keywordseo="vladimir-putin" source="keywords">Vladimir Putin</keyword>, Indian Prime Minister Narendra Modi and Chinese President <keyword id="19946362" type="General" weightage="20" keywordseo="Xi-Jinping" source="keywords">Xi Jinping</keyword> will attend the 16th <keyword id="21003379" type="General" weightage="20" keywordseo="BRICS-summit" source="keywords">BRICS Summit</keyword> in Kazan, Russia, from October 22-23, 2024. The summit will focus on the theme "Strengthening Multilateralism for Just Global Development and Security," providing a key platform for leaders to discuss pressing global issues and explore opportunities for collaboration. The <keyword id="20037428" type="General" weightage="20" keywordseo="BRICS" source="keywords" meta.keywordsubtype="org" meta.entityname="BRICS" meta.hostid="261" meta.entityid="BRICS">BRICS</keyword> group, originally formed by Brazil, Russia, India, and China in 2006, has grown to include South Africa, and recently expanded further to welcome Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE, making it a 10-member bloc. <keyword id="19911498" type="General" weightage="20" keywordseo="Putin" source="keywords">Putin</keyword> sees this <keyword id="23595116" type="General" weightage="20" keywordseo="expanded-BRICS" source="keywords">expanded BRICS</keyword> as a counterweight to Western dominance in global politics and trade. During his visit, <keyword id="19899320" type="General" weightage="100" keywordseo="PM-Modi" source="keywords">PM Modi</keyword> is expected to hold bilateral meetings with fellow BRICS leaders and other invited representatives, aiming to strengthen partnerships and advance shared objectives. The Indian Ministry of External Affairs emphasised that the summit will offer a valuable opportunity to evaluate the progress of BRICS initiatives and identify new areas for future collaboration. Modi's visit to Russia follows an informal meeting with Putin in Moscow earlier this year and a call in August, where the Indian leader urged for a resolution to the Ukraine conflict. The upcoming summit highlights the growing <keyword id="23595115" type="General" weightage="20" keywordseo="geopolitical-significance" source="keywords">geopolitical significance</keyword> of BRICS in reshaping global dynamics. (With inputs from sources)

PM Modi to meet Putin and Xi Jinping at BRICS summit in Russia on October 22-23

<ul class="summary-list"><li><keyword id="11894337" type="UNKNOWN" weightage="60" keywordseo="russia" source="Orion">Russia</keyword> and Indian refiners are set to trade oil not in US <keyword id="12585153" type="UNKNOWN" weightage="60" keywordseo="dollars" source="Orion">dollars</keyword> but in the <keyword id="11894947" type="UNKNOWN" weightage="60" keywordseo="uae" source="Orion">UAE</keyword>'s local <keyword id="12055585" type="UNKNOWN" weightage="60" keywordseo="currency" source="Orion">currency</keyword>, Reuters reported. </li><li>Sources told Reuters that more deals priced in UAE dirhams will happen as Moscow looks to insulate itself from sanctions. </li></ul>Russia is looking to complete an oil deal with Indian refiners using the United Arab Emirates' local currency, rather than in dollars, according to a <a href="https://www.reuters.com/business/energy/exclusive-russia-seeking-oil-payments-india-dirhams-sources-document-2022-07-18/">Reuters</a> report. An invoice seen by Reuters revealed an Indian refiner was asked to pay for deliveries in dirhams, though the figure was first calculated in dollars. A payment in dirhams was made out to Gazprombank via Mashreq Bank, its corresponding bank in Dubai.At least two Indian refiners have already settled some transactions using dirhams, and there are more to come soon as trading firms used by Rosneft only just started asking for payments in dirhams this month, the report added. The moves signal Moscow is increasingly distancing itself from the US dollar as a way to minimize the impact of Western sanctions. Typically, the dollar is the primary international trade currency, especially for commodities like oil. This also affords the US political and financial leverage over other nations, as exhibited by recent sanctions imposed on Moscow. But Russia looking to alternate currencies now.Earlier in March, Russia and India were in talks to revive a <a href="https://markets.businessinsider.com/news/currencies/dedollarization-russia-india-rupee-ruble-currency-deal-us-sanctions-ukraine-2022-3?utm_medium=ingest&amp;utm_source=markets">Cold-War era currency pact</a> to evade sanctions too. A rupee-ruble ledger would allow the nations to do business without the use of US dollars. Additionally, in recent months <a href="https://markets.businessinsider.com/news/currencies/dollar-vs-yuan-chinese-exports-russia-ruble-trade-ukraine-moscow-2022-7">trade volume between yuan and rubles have soared</a>, hitting a six-month high in June, Bloomberg data shows. Spot trading between the two currencies hit $48 million in the interbank market last month.

You Searched For "India UAE trade" and got 12 results

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India, UAE in talks for rupee-dirham denominated bilateral trade

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Sanctions-hit Russia is rushing to set up payment systems, including crypto, to make trading easier

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Oil prices would double if India didn't trade with Russia, energy minister says

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PM Modi to meet Putin and Xi Jinping at BRICS summit in Russia on October 22-23

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Russia distances itself from the US dollar further as it moves to trade oil with India using the UAE's local currency: report

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