India's getting around sanctions against Russia by using Asian currencies to buy Russian coal

According to a review of customs documents and industry sources, Indian companies are increasingly using Asian currencies to buy coal from Russia in order to avoid Western sanctions.

Russia has to price its energy products at heavy discounts in order to attract price sensitive buyers like India and China.

Most global trade in commodities is usually denominated in the US dollar, but the sanctions have caused some countries to switch to alternative payments systems.

Russia exported over two million metric tons of coal to India in July, making it the South Asian nation's third-largest supplier. According to the news agency, Indian coal buyers have been using a number of foreign currency for their purchases.

According to a summary of deals compiled by a trade source based on customs documents, in June, coal buyers in India paid for 42% of the coal it imported from Russia using non-dollar currency. The euro accounted for 25% of the non-dollar payments, while the dirham made up 18%, according to the report.

India did not impose sanctions against Russia over the war inUkraine. The rupee has hit a record low against the US currency, meaning the cost of dollar denominated imports have gone up. The rupee has lost ground against the dollar but gained against the euro.

It is one of a number of emerging nations that have been buying cheap Russian energy imports. The countries that have said they are looking for Russian fuel imports are Brazil, Sri Lankan, and Laotian.

Russia and China are trying to escape sanctions by establishing alternatives to the US dollar. An alternative ruble payment system was being considered by India. Five of Turkey's banks have begun to use Russia's Mir payments system.