By purchasing oil from Russia, india is helping to reduce the upward pressure on oil price for the rest of countries. If India who is one of biggest buyers of crude oil goes to same suppliers as everyone else than it will push the prices up for everyone. So India’s purchase from Russia is helping keep the prices down for everyone.
India buying Russian oil have not control inflation to some extend India, plus India got leverage with Iraq to get discounted oil. Long term our business relationship with European & USA has not effected much. Also our factory r not affected like higher prices like factories in Europe because of high gas prices . Overall buying cheap oil not a bad deal
There are couple of things here which you have very easily assumed. Your whole view is rested on the fact that probably Ruble is cheaper than what we think and probably India is paying higher. However even if you are paying ruble equivalent to USD barrel price the conversion will ultimately happen from INR to Ruble not USD to Ruble and Ruble is not as strong as dollar. Even if India enters into currency swap and has a trade deficit, it will still be lower as INR is close to Ruble. Also other important point is, this is not a long term contract. As soon as deal turns loss making, India can come out of it. But the point you probably are missing is India is creating a store of oil for adverse situations when oil is traded cheaper than actual value. That way it can partially fulfill requirements of European countries as they deal with oil crisis.
Ruble conversion rate don't matter because we're not paying more than 80 dollars per barrel. International price is 130$ / barrel so technically we're in profit.
If we are paying $80 instead of $40 still it’s cheaper than $130 I guess. With the rubles we can buy weapons, so we are not just stacking rubles. We can’t avoid $ totally but use few major currencies.
Russia did invade ukriane so as a punishment the dollar which Russia has earned through trade has been blocked through sanctions ...but the point is that what if USA violates the same kind of international law in the future...would it be possible to sanction USA...No..what an injustice it will be...hence it is important to bring in the new concept of centralised currency for the international trade so no indivisual could use it as the tool to serve the self interest of one nations political hageomony
This may be one sided (EU & US's viewpoint to mislead) and without basic logical explanation... As India-Russia have fixed rate in dollars on basis of international crude oil price (say fixed at $ 80 discount of $30 from $110 of current international price), not fixed in rubble, then obliviously India will pay whatever currency but equivalent to fixed rate in dollar (here $80) only...so whatever be the exchange rate be of rubble to dollar won't be concern of Indian side. If Rubble rate is going higher then automatically India will pay less rubble as in 80$ less rubble will come and vise-versa. This may lead to raise in exchange rate of Rubble against dollar but won't lead to loss to even a penny to India in any case. If we take holistic approach....then price rise of Crude Oil is being be controlled by these type of imports by India/China (as India-China Are in top 5 importer of Oil) and this finally is contributing in taming inflation in whole world. Crude Oil price and by far Inflation in India did not rise even after Ukrine war and Sanction on Russia owing to mainly import of Oil from Russia at discounted price. Further by taming inflation India is now on safer side of coming under recession unlike US & EU -as inflation use to lead to affect demand and finally to lower GDP in medium to long run. Internationally also India's position has become stronger. So overall too India has done excellent job... Please think before putting view or logics ..as your institution is known for IAS preparation too. Don't make jokes or WhatsApp forward logic.
RIP to those who think India is buying oil as it is getting cheap.Clearly India is helping russia amid global sanctions and there is nothing wrong with it.They helped us in the past.At that time they did not think about sanctions.So shouldn't we.
Question is how you correlated US dollar use with economic growth. Maybe there is a point of common currency but maybe it’s time to move on from dollar and use something more substantial like gold equivalent . You must have heard that India was a flourishing economy even before America/ dollar was born.
Rupee Ruble is almost equivalent to each other. If Ruble value goes down it's actually beneficial for India. Rising value of Ruble wrt other currencies is very unlikely. Bilateral currency swap is practical with friendly nations only.
Boss if for example we are getting 1 barell of oil at rupee 80 From Russia then saudi which is selling for rupee 100 for barell. Simply we are comparing price in Indian currency
Do not agree with the analysis! We know clearly what the oil price is in US dollars internationally and even if we do not know the exact fluctuation in Rubles we know the exact number of rupees we get for a dollar. We are saving much more money and their is no doubt because Rubles is not fluctuating by that much (35%) and since no one else is willing to give us oil at the price Russia is we are doing a good business. More importantly, it is the amount of dollars that is causing Sri Lanka and Pakistan the economic crisis and we need to preserve as many dollars as we can because majority of commodities are sold and bought in international market using US $.
I agreed with facts, how ever I disagree with conclusion ! (Yes it is possibility). Pro implications INDIA is Able to stand global pressure easily and make diction in favor of its interests!
Bhai rubble value agar 40 hogi $80 ke liye to iska matlab rubble usd se jayda strong hai. Hum kam rubble de rahe hai jayda nahi. For example Indian rupee ki keemat abhi 1$= 79 hai aur agar Indian economy decline karegi to 1$ = ₹40 thoda hoga ₹ to mhenga ho hoga. Rubble ke value jo bhi ho us se kya farak padta hai hum to $80 hi de rahe hai baad me woh rubbles me convert hokar unhe milenge. Humari pocket se to $80 ke equivalent ₹ hi ja rahe hai.
Sir few points that made me think on this video. Russian banks are out of swift banking system. My assumption is that it includes oil and natural gas sales as well. Even if we want to buy Russian oil in usd it is not possible. In that case yes it is the only option for us to buy the oil in Ruble. Please correct me if I am wrong. Also, due to the strengthening of usd we might actually end up paying more INR to buy usd and purchase oil in comparison with buying in rubles. The way usa is weponising usd to punish countries who don't listen to it, I think steps like bilateral trade in such areas are needed. Small countries may not afford but we are in a state to afford it a bit atleast is what I feel.
Understood your view, but no one knows the excat rubble price (will be know after war ends) and right now we are buying discounted oil in dollar terms, so dont make it complex beacuse this is simple case study, we are getting oil at discounted rates in dollar terms i.e around USD 80 payable in ruble
India has done the right thing by considering its interests since inflationary pressure would have been much higher and in that case the same people would be highlighting inflation.. and show the Government in poor light. Need of the hour is to appreciate right and put down wrong irrespective of party you belong to. This will make the parties themselves more responsible
That's y I admire Dr Jaishankar. Ur adversaries will try to scare u, deceive u and lie to u but u must absolutely know ur strength and ur position in the negotiation table. Or u will always be pawn to one who knows its strength.
The ground reality is that past several months diesel is sold at 87 to 88 rs in the state enterprises like ioc bpcl hpcl s and the same fuel costs 115 rs in private run enterprises such as Shell who buy oil in $ . A wopping 27 rs difference in diesel prices . Now imagine the impact on our economy the fuel price would have had, throughout the sector . Business in Uk are on the verge of shutting down on account of price escalation of energy and the govt is rolling out eco packages with billions of £ .
May be Rouble is not trading against USD , but one can easily find its true value by comparing it with gold. Using the gold benchmark, can you say that India made a loosing deal ?
1.)It is quite hilarious to forget the very point..which is Europe is buying in ruble too 😂...which clear your point about the ruble's volatility 2.) Oil is not going any where till insurance companies doesn't start their drama 3.) Are we strategically losing...no govts not that much...to media/think tanks probably Yes...and this is the trade off which we are pursuing Now come to your point: Is india is going to gang up against Dollar Ans : Are you serious 😆...India is trying to have a secondary system (which is till now not successful because the reason you mentioned...use of dollars with that ease)...hence don't worry...India is not going to do anything wrong with dollar...we can't (i hope you covered that story where Mr. manmohan singh advised the similar thing) It is Russia and China who are trying to replace dollar for obvious reasons)
But this product has partially helped in preventing energy shortages when you see inflation in EU and USA. In fact EU and USA has shot their own feet and they are not able reverse the situation in any manner.
Don't you think ,our Strategic system is so smart to understand this basic concept. Further if Ruble price is low trading then there will be more ruble against dollar right not less..see this video from 12:45 onwards.
We need new friend to make india great it was 1971 but now it's 2022 so we should change our thinking. Biggest problems of Indians are they always busy for reminding past instead of making good future
Its not a loss becz russia has told countries who are in its Enemy list to pay in rubles. Other friendly countries like india are allowed to pay in dollars or in local currency.
If 1$ costs 40 rubles instead of 80 rubles at the time of Ukraine war ,then value of $ decreases,with decreased value of $ + lower cost of oil ,India is in much higher profit in buying cheap oil
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But at the same time India is getting oil in less price than other exporters...so overall it is a profitable deal for india
By purchasing oil from Russia, india is helping to reduce the upward pressure on oil price for the rest of countries. If India who is one of biggest buyers of crude oil goes to same suppliers as everyone else than it will push the prices up for everyone. So India’s purchase from Russia is helping keep the prices down for everyone.
Right
True this has helped to bring down the oil prices which were rocketing skyhigh.
@@Rkk153 but prices are increasing why?
India buying Russian oil have not control inflation to some extend India, plus India got leverage with Iraq to get discounted oil. Long term our business relationship with European & USA has not effected much.
Also our factory r not affected like higher prices like factories in Europe because of high gas prices .
Overall buying cheap oil not a bad deal
There are couple of things here which you have very easily assumed. Your whole view is rested on the fact that probably Ruble is cheaper than what we think and probably India is paying higher. However even if you are paying ruble equivalent to USD barrel price the conversion will ultimately happen from INR to Ruble not USD to Ruble and Ruble is not as strong as dollar. Even if India enters into currency swap and has a trade deficit, it will still be lower as INR is close to Ruble. Also other important point is, this is not a long term contract. As soon as deal turns loss making, India can come out of it. But the point you probably are missing is India is creating a store of oil for adverse situations when oil is traded cheaper than actual value. That way it can partially fulfill requirements of European countries as they deal with oil crisis.
Exactly India is actually paying in dollars equivalent of rubel
Ruble conversion rate don't matter because we're not paying more than 80 dollars per barrel. International price is 130$ / barrel so technically we're in profit.
Exactly my point
And it costs us more because of sea routes
Government also aware of it
International prices are like $90/barrel
@Everything Shorts may be
If we are paying $80 instead of $40 still it’s cheaper than $130 I guess. With the rubles we can buy weapons, so we are not just stacking rubles. We can’t avoid $ totally but use few major currencies.
Russia did invade ukriane so as a punishment the dollar which Russia has earned through trade has been blocked through sanctions ...but the point is that what if USA violates the same kind of international law in the future...would it be possible to sanction USA...No..what an injustice it will be...hence it is important to bring in the new concept of centralised currency for the international trade so no indivisual could use it as the tool to serve the self interest of one nations political hageomony
bit coin crypto currency 💪 😂
@@Codephile Like what
Very good points
Gold standard.
great insight
Our digital UPI is reaching to international market that was good for to trade directly from others
If India is in a trade deficit with Russia then buying in Rubble will help us preserving our foreign exchange (USD) . Isn't it ?
Thanks
This may be one sided (EU & US's viewpoint to mislead) and without basic logical explanation...
As India-Russia have fixed rate in dollars on basis of international crude oil price (say fixed at $ 80 discount of $30 from $110 of current international price), not fixed in rubble, then obliviously India will pay whatever currency but equivalent to fixed rate in dollar (here $80) only...so whatever be the exchange rate be of rubble to dollar won't be concern of Indian side. If Rubble rate is going higher then automatically India will pay less rubble as in 80$ less rubble will come and vise-versa. This may lead to raise in exchange rate of Rubble against dollar but won't lead to loss to even a penny to India in any case. If we take holistic approach....then price rise of Crude Oil is being be controlled by these type of imports by India/China (as India-China Are in top 5 importer of Oil) and this finally is contributing in taming inflation in whole world. Crude Oil price and by far Inflation in India did not rise even after Ukrine war and Sanction on Russia owing to mainly import of Oil from Russia at discounted price. Further by taming inflation India is now on safer side of coming under recession unlike US & EU -as inflation use to lead to affect demand and finally to lower GDP in medium to long run. Internationally also India's position has become stronger. So overall too India has done excellent job... Please think before putting view or logics ..as your institution is known for IAS preparation too. Don't make jokes or WhatsApp forward logic.
RIP to those who think India is buying oil as it is getting cheap.Clearly India is helping russia amid global sanctions and there is nothing wrong with it.They helped us in the past.At that time they did not think about sanctions.So shouldn't we.
Question is how you correlated US dollar use with economic growth. Maybe there is a point of common currency but maybe it’s time to move on from dollar and use something more substantial like gold equivalent . You must have heard that India was a flourishing economy even before America/ dollar was born.
Yes, Gold is the best ever solution.
Ye to relative loss ho sakta hai but not the actual loss, bcoz ultimately v r getting cheaper crude
Rupee Ruble is almost equivalent to each other. If Ruble value goes down it's actually beneficial for India. Rising value of Ruble wrt other currencies is very unlikely. Bilateral currency swap is practical with friendly nations only.
Sir, Rouble-Euro m trade toh ho hi raha hai aur Dollar-Euro mein bhi.. toh iske help se hm Rouble-Dollar la exchange rate pta kr skte hain.
Boss if for example we are getting 1 barell of oil at rupee 80 From Russia then saudi which is selling for rupee 100 for barell. Simply we are comparing price in Indian currency
Do not agree with the analysis! We know clearly what the oil price is in US dollars internationally and even if we do not know the exact fluctuation in Rubles we know the exact number of rupees we get for a dollar. We are saving much more money and their is no doubt because Rubles is not fluctuating by that much (35%) and since no one else is willing to give us oil at the price Russia is we are doing a good business. More importantly, it is the amount of dollars that is causing Sri Lanka and Pakistan the economic crisis and we need to preserve as many dollars as we can because majority of commodities are sold and bought in international market using US $.
I agreed with facts, how ever I disagree with conclusion ! (Yes it is possibility). Pro implications INDIA is Able to stand global pressure easily and make diction in favor of its interests!
Bhai rubble value agar 40 hogi $80 ke liye to iska matlab rubble usd se jayda strong hai. Hum kam rubble de rahe hai jayda nahi.
For example Indian rupee ki keemat abhi
1$= 79 hai aur agar Indian economy decline karegi to 1$ = ₹40 thoda hoga ₹ to mhenga ho hoga. Rubble ke value jo bhi ho us se kya farak padta hai hum to $80 hi de rahe hai baad me woh rubbles me convert hokar unhe milenge. Humari pocket se to $80 ke equivalent ₹ hi ja rahe hai.
At this point I am ready to use a bicycle. Helps our country and my health. 🙂👍
If you use a bicycle in order to help the motherland, I salute you.
Sir few points that made me think on this video.
Russian banks are out of swift banking system. My assumption is that it includes oil and natural gas sales as well. Even if we want to buy Russian oil in usd it is not possible. In that case yes it is the only option for us to buy the oil in Ruble. Please correct me if I am wrong.
Also, due to the strengthening of usd we might actually end up paying more INR to buy usd and purchase oil in comparison with buying in rubles.
The way usa is weponising usd to punish countries who don't listen to it, I think steps like bilateral trade in such areas are needed. Small countries may not afford but we are in a state to afford it a bit atleast is what I feel.
I think if Russia has to choose between China and India. Russia will choose China. Economy is the main factor. Trade,militarly, tech.
Already chosen.
Understood your view, but no one knows the excat rubble price (will be know after war ends) and right now we are buying discounted oil in dollar terms, so dont make it complex beacuse this is simple case study, we are getting oil at discounted rates in dollar terms i.e around USD 80 payable in ruble
India has done the right thing by considering its interests since inflationary pressure would have been much higher and in that case the same people would be highlighting inflation.. and show the Government in poor light. Need of the hour is to appreciate right and put down wrong irrespective of party you belong to. This will make the parties themselves more responsible
👏👏👏well explain
Can we make gold or any precious metals price as a common factor for conversion of various currencies.
Than in the current scenario in what terms does india actually payimg to russia?
That's y I admire Dr Jaishankar.
Ur adversaries will try to scare u, deceive u and lie to u but u must absolutely know ur strength and ur position in the negotiation table. Or u will always be pawn to one who knows its strength.
We can use ruble to trade russian weapons.
Need not worry about international exchange
Very Good explanation and information.
Not preparing for upsc ias.... Bt still i enjoyed watching ... I give so much knowledge 😁
Very good information 👍👍🇮🇳
Nice narration..!! Cool insights
All the trouble about deciding currency to trade. Is it not possible to trade in gold??
Kitni tehzeeb kitni pyaar se samjhate hn sir
The ground reality is that past several months diesel is sold at 87 to 88 rs in the state enterprises like ioc bpcl hpcl s and the same fuel costs 115 rs in private run enterprises such as Shell who buy oil in $ . A wopping 27 rs difference in diesel prices . Now imagine the impact on our economy the fuel price would have had, throughout the sector .
Business in Uk are on the verge of shutting down on account of price escalation of energy and the govt is rolling out eco packages with billions of £ .
sir! u said that buyng oils from russia is loss, we dont have any choice to buy oils from opec
Euro is also currency to understand ruble value .Pl explore and update the basis for payment
Cost per barrel vs transportation and landed cost at our port ?
May be Rouble is not trading against USD , but one can easily find its true value by comparing it with gold. Using the gold benchmark, can you say that India made a loosing deal ?
I have That same question when rubal shoot up
This is good for National finance
Good analysis . Appreciate
Russia is special. Loss profit aside, Indians love Russia 🇷🇺 🇮🇳
Sir please is topic ka PDF provide kyjye
they linked rouble to gold. so market value is determinable.
Study iq is best 👍 sach me dimaag k dhakan khol deta hai 🙏 Jai Hind Jai Bharat 🇮🇳
Interesting information
Ye article likha kisne hai bhai India today pr?
Your analysis top notch.
I ALWAYS LIKE YOUR ANALYSISTHANK YOU
We should buy in our own currency which is in our national interest and support Russia our true all weather friend
Good analysis, on wholistic impact
🙏 Sir nice video Jo bhi hoga Badhiya hi hoga badalao samay hi lata hai 🙂
Wish you happy year ☺️
PLEASE MAKE ANALYSIS ABOUT LOSS OF TIBETT TO CHINA
Very nice explain
Very good content
Oversimplification of currency inflation supply demand is the last thing one should do
Your views are correct.
Since we are getting discounted price in dollar, weather you pay in rupee Or Ruben we are in profit.
1.)It is quite hilarious to forget the very point..which is Europe is buying in ruble too 😂...which clear your point about the ruble's volatility
2.) Oil is not going any where till insurance companies doesn't start their drama
3.) Are we strategically losing...no govts not that much...to media/think tanks probably Yes...and this is the trade off which we are pursuing
Now come to your point: Is india is going to gang up against Dollar
Ans : Are you serious 😆...India is trying to have a secondary system (which is till now not successful because the reason you mentioned...use of dollars with that ease)...hence don't worry...India is not going to do anything wrong with dollar...we can't (i hope you covered that story where Mr. manmohan singh advised the similar thing)
It is Russia and China who are trying to replace dollar for obvious reasons)
Good video.
Nice analysis 👌🙏
Dr.Jayashankar told this on the face of UK external affairs minister now PM!.. what is the big deal..Russians also never claimed it !..
But this product has partially helped in preventing energy shortages when you see inflation in EU and USA. In fact
EU and USA has shot their own feet and they are not able reverse the situation in any manner.
Also Russia can exchange Indian rupees against the Dollar in international market
Don't you think ,our Strategic system is so smart to understand this basic concept. Further if Ruble price is low trading then there will be more ruble against dollar right not less..see this video from 12:45 onwards.
International system has to be decided by large economic countries.....Dollar is sunset currency
Thank you so much ji.
But India is exporting the other countries with higher prices including petroleum products
Anyways - both Russia and India are gaining from this arrangement. It’s a win win deal.
Very good idea
Agar market value se kam mil raha hai then i think it's win win situation
Nice job bro..👍🏻
16:00 Agree
Great thoughts great analysis 👍
Thankyou very much Sir,
Nicely and clearly explained
Great analysis sir thanks
We can do transections in rupees.
What abouts the Europeans country paying in roubles??
Indian currency or any international currency can replace us dollar dependence
Ruble exchange which shows on google by google.. May be not accurate but I don’t think that no one knows what is the xchange rate is…
But india ke to 130 ki jgah 80 dollar hi kharch hue na... bs rubble ki demand bad gyi isse
Why can't India use AMM (Automated Market Making) for swaping inr/rub
Volatility and Risk of Hyper Inflation of either exchanges, just as in case of Crypto currency I guess
Excellent
Ultimately, for each trade, how much cheaper it is in rupee equivalent is what matters and that can be easily calculated.
Thanks...
Yes your logic correct but at the same time you can weaken your all time ally.
Excellent Presentation.. Keep it up Bro.. 🤔👌
Right decision right time .
Rubel benefiting is better than Dollar getting stronger as US Dollar is too strong by itsel.
Still petrol price around 100, ultimately discounted oil price is not benefiting nation. Government enjoying and public suffering.
We need new friend to make india great it was 1971 but now it's 2022 so we should change our thinking. Biggest problems of Indians are they always busy for reminding past instead of making good future
Its not a loss becz russia has told countries who are in its Enemy list to pay in rubles. Other friendly countries like india are allowed to pay in dollars or in local currency.
If 1$ costs 40 rubles instead of 80 rubles at the time of Ukraine war ,then value of $ decreases,with decreased value of $ + lower cost of oil ,India is in much higher profit in buying cheap oil
Hello, oil and gas and also fertilizer is out of sanctions...