India's oil trade, in response to the turmoil of sanctions and the Ukraine war, provides the strongest evidence so far of a shift into other currencies that could prove lasting.

Refiners' import appetite for Russian barrels is likely to remain robust as long as the economics are favorable, and financial and logistical services to support the trade are available. Russia is selling record amounts of crude oil to India to plug the gap in its energy exports after the European Union banned imports in December.

In December, the EU banned Russian seaborne oil and imposed a $60-per-barrel price cap, which prevents other countries from using EU shipping and insurance services, unless oil is sold below the cap.

Industry officials said Indian refiners are using UAE's dirham to pay for oil that is imported at a price lower than $60.
India has prepared a framework for settling trade with Russia in Indian rupees should rouble transactions be cut off by further sanctions, the sources said.

Asked for comment, the U.S. Treasury referred to the assertion by U.S. Treasury Secretary Janet Yellen two weeks into the war: "I don’t think the dollar has any serious competition and is not likely to for a long time."

From a market share of just 0.2% in India's import basket before the start of the Russia-Ukraine conflict, Russia's share in India's imports rose to 35% in February 2023.