De-dollarization in Action: Russia Forces India to Pay for Oil in Renminbi, Accelerating the New Global Financial Order

In October 2025, Russian oil traders formally mandated that Indian state-owned refineries settle crude oil transactions in Renminbi (RMB). This move is viewed by Russia as a strategic step to accelerate its de-dollarization efforts and a crucial advancement in streamlining transaction processes following the easing of Sino-Indian relations.

Russia's Hard Stance and Strategic Calculus

Russia's decision to impose the RMB as the sole settlement currency for Indian oil addresses a dual imperative: efficiency and strategic security.

1. Financial Optimization and Efficiency

Previously, mixed payments in USD, Dirham, or RMB required a complex and costly conversion process. Specifically, Dirham or USD payments necessitated a double conversion into RMB before they could be converted into Rubles. The RMB, however, can be converted directly into Rubles, making it the Russians' preferred choice for its efficiency.

2. Sanctions Evasion and Strategic Dependency

Russia maintains the practice of pricing oil in USD (thereby adhering to the EU's $60 per barrel price cap) but demands payment of the equivalent amount in RMB. This respects sanctions regulations while ensuring Russian capital efficiency. The move is backed by Moscow's growing reliance on the Chinese currency: the RMB accounts for 42% of Russia's foreign trade (2025 data), with the Russian Central Bank committed to expanding its use.

Moscow’s threat is clear: should India refuse to use the RMB, Russia is prepared to reroute oil tankers to China (as occurred in 2024 with a shipment originally intended for India, diverted to Huanghua Port).

India's Contradictions and Pragmatic Compromise

India finds itself compelled into a pragmatic compromise, driven by urgent energy needs despite deep internal political concerns.

1. Essential Energy Requirements

Oil imports from Russia's Rosneft account for 35%-40% of India's total imports (up from 1% in 2021), averaging about 1.75 million barrels per day. The purchases are made at a discount of $10–$15 per barrel below the international benchmark, resulting in cumulative savings of over $12.6 billion in three and a half years. The Indian government conceded to the RMB requirement after its largest state refiner, Indian Oil Corporation, already completed two or three payments in the Chinese currency.

2. Strategic Response to US Pressure

Facing the imposition of a 50% punitive tariff on Indian products by the Trump administration (August 2025), India responded firmly: "If the United States will not provide us with equally cheap oil sources, we will continue to buy Russian oil." India also suspended $3.6 billion in US arms purchases and threatens additional tariffs on US agricultural products, prioritizing strategic independence.

3. Political Hurdles and Internal Costs

Despite the easing of Sino-Indian relations in 2025 (culminating in Modi’s first visit to China in seven years), deep vigilance remains over the border. India also faces the financial burden of currency exchange: Rupees must first be exchanged into Hong Kong Dollars and then converted into RMB, increasing the cost by 2–3% compared to using the Dirham.

Global Implications and Future Trends

This incident highlights a triple crisis for the West and accelerates the evolution of the global financial system:

1. Failure of US Geopolitical Strategy and Double Standards

Despite US threats to cut off India from the SWIFT system, no action was taken, revealing the contradictions of its sanctions regime. The EU continued to import over 20 billion euros worth of Russian fertilizer in 2024, and the US continued to buy Russian uranium. Treasury Secretary Benson was accused of "war profiteering opportunism" toward India while calling Chinese oil purchases "reasonable."

2. Acceleration of De-dollarization

Russia's coercion is a crucial step against Western financial hegemony. The large-scale use of the RMB for Russian-Indian oil in third markets is a breakthrough in energy trade. While the RMB's effective share in global trade settlements is still under 10%, the expanding scope of de-dollarization (with Brazil and Argentina increasing RMB import payments) and attempts by Saudi Arabia and Venezuela to create a "petro-renminbi + gold" cycle are shaking the foundations of the petrodollar system.

3. Restructuring the Geopolitical Landscape

US-India relations are deteriorating, while China, Russia, and India are strengthening their interactions. India is accelerating its advance toward the BRICS countries, coordinating Putin's visit to India and reinstating tourist visas for Chinese citizens. The essence of the incident is clear: India's pragmatic compromise was driven by strategic independence and billions in savings. This process marks an irreversible evolution of the global trade settlement system from a "unipolar dollar" to a "multipolar currency system."