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Experts: Is it profitable for Russia to invest petrorupies not only in India? – Rossiyskaya Gazeta

Date: April 19, 2024 Time: 15:57:18

The statement by the head of our Foreign Ministry, Sergei Lavrov, that Russia could invest petrorupiahs trapped in India in the economy of this country was received ambiguously. Some experts say that the acquisition of Indian oil refineries (ORP) would be a profitable investment. Others point out that this money is being withdrawn from our economy. Even the amount of funds from Russian companies locked up in India was announced: $39 billion, Reuters reports.

The story took an unexpected turn when India’s ambassador to Russia, Pawan Kapoor, said that for the last year and a half, India had paid for Russian oil only in hard currency. After this, speculation appeared in the media that “frozen rupees” were a way for unscrupulous traders, including Russians, to evade taxes.

If we start to understand this contradictory data, then the rupee trade with India has been known since the middle of last year. Yes, the rupee is not a freely convertible currency and as per Indian laws, it cannot be taken out of the country. But then some unknowns begin.

As noted by the director of the National Energy Security Fund, Konstantin Simonov, the amount of 39 billion dollars arose as a result of a simple recalculation of the volume of transactions, which are recorded by Indian customs, in rupees and dollars. Now, in the context of sanctions and the fight against them, neither the Indian ambassador nor journalists have precise data on how much and in what currency certain oil shipments were sold, explains the expert.

In his opinion, saying that we get nothing by selling oil to India and that is precisely why the ruble exchange rate has fallen is far from the truth. A simple proof that the funds for our oil go to Russia is that our oil companies make regular payments to the budget. And today India is the second largest importer of Russian crude oil and a fairly important recipient of our petroleum products. Payments to our budget are made not in rupees, but in rubles, so there is some kind of conversion mechanism. This scheme is likely associated with merchants in non-sanctioned jurisdictions carrying out this conversion.

As for investments in the Indian economy, from Simonov’s point of view, everything must be done on time. India’s oil refining industry has been growing in the last two years, but it is too late to invest in it. It is better to look at neighboring countries, for example Indonesia, where the potential for the development of oil refining is very high, the expert notes.

Investments in oil refineries in Indonesia can be profitable

Even more critical is Dmitri Gusev, vice-chairman of the supervisory board of the Association of Reliable Partners. He believes that if stagnant funds remain in rupees in India, then it is an asset we cannot utilize. Even if you invest in some company, the rupees will earn you rupees which, in turn, cannot be withdrawn from the country.

A similar opinion was expressed by Freedom Finance Global analyst Vladimir Chernov. In his view, “stagnant” petrorupee investments in the Indian economy can only be profitable in the long term, although there are big risks to the liquidity of such investments. Therefore, they cannot be considered profitable for export companies, since they could now invest these funds in expanding their own business, increasing production and refining, purchasing tankers and increasing their income.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Hansen Taylor
Hansen Taylor
Hansen Taylor is a full-time editor for ePrimefeed covering sports and movie news.
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