Indian company’s yuan settlement welcomed: experts

Indian company UltraTech Cement is reportedly using the Chinese yuan to settle payments with a Russian business partner, a move hailed by Chinese experts as boosting the yuan’s global clout.

UltraTech is importing “157,000 tons of coal from Russian producer SUEK that is loaded on the bulk carrier MV Mangas from the Russian Far East port of Vanino,” an Indian customs document reviewed by Reuters shows, while the settlement currency is in yuan.

“The cargo’s sale was arranged by SUEK’s Dubai- based unit,” and other companies have also placed orders using yuan payments for Russian coal, Reuters said.

Neither UltraTech nor SUEK responded to the Global Times’ request for comment as of press time.

While Reuters said it is “rare” to use the yuan for trade settlement from countries other than China, experts are not surprised, since the yuan has increasingly become a good and reliable alternative to the US dollar.

“Using the yuan for international trade settlement is nothing to be surprised about, since the yuan’s internationalization is a market- driven trend, which comes along with the rising international trade and economic status of the country,” Zhao Xijun, co- director of the Capital Market Research Institute at Renmin University of China, told the Global Times on Thursday.

The internationalization of the yuan comes as the dominance of the US dollar weakens, ignited by the US’ relentless wielding of the stick of economic coercion and the dollar hegemony on the international stage to serve its own interests, Zhao said.

The bulk commodities trade between India and Russia was mainly settled with the US dollar, but the situation changed after the US barred Russia from the SWIFT system. Countries trading with Russia such as India must come up with a currency that both are able to accept in order to sustain normal trade activities and the yuan is a good alternative, experts said.