With Prime Minister of India Narendra Modi before the SCO Heads of State Council Meeting. Photo: Sergei Bobylev, RIA Novosti. Source: Kremlin website.India and Russia just flipped the bird to the U.S. yet again. Earlier today, Prime Minister Narendra Modi called President Vladimir Putin to wish him happy birthday, but this wasn’t just about cake and candles.
During the call, both leaders agreed to push forward what they call their “special and privileged strategic partnership,” a label that’s been gathering dust until now.
Modi told Putin he’s ready to welcome him to Delhi for the annual India–Russia summit, though no one said when that’ll actually happen. Timing seems irrelevant when the message is loud and clear: this duo is getting tighter, and Donald Trump’s warnings aren’t moving the needle.
Trump had previously demanded that India stop buying Russian oil, but India ignored him.
So Washington slapped a 50% tariff on Indian exports, essentially throwing a tantrum. U.S. trade talks with India stalled right after that, with the Trump administration saying India’s dealings with Russia are a “key issue” if India ever wants those tariffs gone.
Modi clearly doesn’t care. He’s not slowing down energy deals just to soothe American egos.
Indian oil companies use yuan for trade to dodge dollar friction
Meanwhile, on the ground, or rather at sea, Russian oil is still flowing into Indian ports, and it’s not just about barrels anymore. It’s about what currency pays for them. Indian state refiners have quietly started paying for Russian oil using Chinese yuan instead of dollars or dirhams.
According to Reuters, sellers are pushing for this change to make deals faster and cheaper. Indian Oil Corp, the country’s top state-owned refiner, has already made at least two or three payments in yuan recently.
In 2023, state refiners used yuan briefly but were told to stop after India’s government got uncomfortable due to tensions with China. That didn’t stop private refiners, as though, they kept using yuan the whole time.
Now that India and China restarted direct flights after a five-year break, and Modi even visited China last month for a regional security summit, the vibe between New Delhi and Beijing seems less icy. So yuan payments are back on the table.
One trader reportedly said that converting dollars or dirhams into yuan and then into Russian rubles, was an expensive middle step. Cutting that out means more profit and faster deals, plus with Western sanctions and the EU’s price cap on Russian oil, traders are pricing oil in dollars but asking for yuan equivalents to stay compliant and get around the red tape.
India has become the top buyer of discounted Russian oil, especially since the West blocked direct imports from Moscow.
This new payment method could give Indian state refiners better access to cargoes that would otherwise go to buyers in China or the UAE. Reuters says some Russian sellers only accept yuan now, which makes India’s switch not just smart, but necessary.
