The Russian and Indian flags
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With India and Russia now conducting a sizeable part of their trade in their respective national currencies, the latter is having to tackle the issue of billions of rupees getting accumulated in Indian banks. For this, they are now making large investments in Indian infrastructure, government securities, as well as stocks, according to a report by Hindustan Times.
This has also helped the Vladimir Putin-led country to continue steady flow of crude despite sanctions that have been put into place by Western countries on Sovcomflot, Russia's state-owned shipping company.
Since 2022, India has ramped up its purchase of Russian crude, thus leading to the piling up of billions of rupees in SRVAs (special rupee vostro accounts). This happened after Russia was banned from using Swift, a payment system accepted globally by financial institutions.
India is the largest consumer of Russian seaborne oil, sold at a discount after Western nations shunned purchases from Moscow for its invasion of Ukraine.
Reliance mainly buys Russian crude but also imports fuel oil for processing at its coker to produce refined fuels.
More Indian refiners are scheduled to receive Russian oil cargoes loaded on SCF vessels, according to LSEG flows.
Earlier in April, Sovcomflot's CEO said that US sanctions are limiting the company's tanker activity. To squeeze Russia's oil revenue, the Group of Seven (G7) large economies and their allies have imposed a $60 per barrel price cap for Russian oil if Western services such as shipping, and insurance are used. And to protect its freight and insurance premium outgo to Western nations, Russia wants to supply its oil, mostly sold by traders, using its own vessels and insurance cover.
Russia's state-owned reinsurer has given financial backing to three Russian insurance firms, allowing them to get Indian approval to provide marine insurance cover to tankers.
Russian companies Sogaz Insurance, Alfastrakhovanie, and VSK Insurance, have joined Ingosstrakh as insurers approved by India for providing marine insurance cover, an order posted on Indian shipping regulator's website showed.
With Reuters inputs