• India has purchased oil from the United Arab Emirates (UAE) using its national currency, the rupee, for the first time.
• China has also purchased energy from the UAE without going through the US dollar, and signed $582.3 billion worth of global currency settlement agreements that will exclusively use yuan.
• The moves are part of BRICS’ effort to abandon the US dollar.
BRICS Member India Ditches US Dollar
India, a member of BRICS – an economic alliance composed of Brazil, Russia, India, China and South Africa – has made history by purchasing oil from the United Arab Emirates using its national currency for the first time ever.
China Follows Suit
In March this year, China’s oil and gas company China National Offshore Oil Corporation reportedly paid in yuan to import 65,000 tons of liquified natural gas from the UAE. Furthermore, in May 2020 China revealed that it had signed $582.3 billion worth of global currency settlement agreements with various nations including UAE which would exclusively use its own local currency –the yuan.
Indian Oil Purchases One Million Barrels Of Oil From Abu Dhabi National Oil Company
The recent move by India was preceded by an agreement between India and the UAE that allowed them to trade with each other using their respective currencies instead of relying on the US dollar as a medium for exchange. Last week Indian Energy company Indian Oil made payments in rupees for purchasing one million barrels of oil from Abu Dhabi National Oil Company (ADNOC).
BRICS Nations Move Away From US Dollar
The recent actions undertaken by both India and China demonstrate how BRICS nations are making concerted efforts to move away from reliance on US Dollar as a medium for international trade , thereby increasing their autonomy over economic matters .
Conclusion
India’s purchase of one million barrels of oil using its national currency is a major milestone in terms of international trade as it signals growing confidence in local currencies as well as increased autonomy over economic matters among BRIC nations who are keen to move away from reliance on USD .