India Exploring Trade in Local Currencies with Gulf Countries

India is exploring the possibility of conducting trade payments with Gulf countries in local currencies. The move is aimed at reducing the rising import bill, especially for crude oil and petroleum products, amid ongoing geopolitical tensions. Officials indicated that global uncertainties are causing supply disruptions, leading to an increase in import costs.

Brent crude oil prices have surged from around $70 per barrel to over $110, significantly impacting India’s economy. As the country relies on imports for nearly 85% of its crude oil needs, the rising prices are expected to widen the trade deficit and increase inflation. With Gulf nations accounting for about 28% of India’s total oil imports in 2024–25, settling trade in local currencies could help ease the financial burden.