India Settles $15 Billion in Rupee Payments for Imports, Mostly Russian Oil

India used its domestic currency to pay for nearly $15 billion worth of imports in March, April and May, according to data from the Reserve Bank of India (RBI). The payments in rupees were likely for oil purchased from Russia, whose share in India's imports surged after geopolitical tensions disrupted global energy routes.

Data released by the RBI this week shows that imports worth Rs 1.38 lakh crore were settled in rupees during these three months, calculations by The Indian Express show. This accounts for 7.1 per cent of India's merchandise imports in the period, approximately $14.6 billion at the average exchange rate of 94 rupees per dollar that prevailed from March to May.

In the preceding three months — December 2025 to February 2026 — imports worth Rs 42,506 crore were settled in rupees, equal to 2.4 per cent of total inbound shipments. The sharp increase reflects a rise in purchases of Russian crude oil starting March, after the United States issued waivers on sanctions for buying Russian oil.

"The rupee's depreciation will only explain a small part of this increased rupee settlement of imports," said Madan Sabnavis, Chief Economist at Bank of Baroda, attributing the jump to higher Russian oil imports.

The value of imports paid for in rupees during March-May far exceeds the totals for full financial years: Rs 99,680 crore in 2023-24 and Rs 1.13 lakh crore in 2024-25. In the financial year 2025-26, rupee settlement of imports reached Rs 1.72 lakh crore.

Russia has become a key oil supplier to India following the US sanctions waiver announced on March 12, which allowed purchases of sanctioned Russian crude. The waiver was extended twice before expiring on June 17, with no renewal since. During this period, India's imports of Russian crude petroleum rose to $17.13 billion in March-May, up 30 per cent year-on-year, according to commerce ministry data.

Paying for imports in rupees reduces the outflow of foreign currency and helps stabilise the exchange rate, which has faced pressure from foreign capital outflows and global geopolitical developments. India's trade deficit in 2025-26 stood at $119 billion.

India has also received rupee payments for its exports, though in smaller volumes. From Rs 15,195 crore in February, rupee-settled exports jumped to Rs 41,373 crore in March — likely due to Russian purchases — before declining to Rs 10,218 crore in April and Rs 8,289 crore in May.

"With India paying for Russian oil in rupees, it makes sense for Russia to use those rupees to pay for what products it can from India," said an economist who declined to be named.