As Washington ramps up efforts to bring India on board with sanctions against Russia, U.S....

As Washington ramps up efforts to bring India on board with sanctions against Russia, U.S. treasury official on visit to Mumbai and Delhi

U.S. Assistant Secretary to discuss Russian oil purchases by India, rupee-rouble trade mechanism

Stepping up the U.S. effort to bring India on board with its sanctions against Russia, Washington has sent another senior official to discuss India’s oil purchases and plans to use the rupee-rouble payment mechanism to circumvent sanctions.

U.S. Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rozenberg arrived in India on Wednesday ahead of meetings with Reserve Bank of India (RBI) officials in Mumbai, as well as officials of the Finance Ministry, Home Ministry and External Affairs Ministry in Delhi, officials said.

Ms. Rozenberg will also discuss the upcoming plenary session of the Financial Action Task Force (FATF) in June, where Pakistan’s grey listing will be reviewed and possible measures against Russia could be discussed.

According to the U.S. Embassy spokesperson, Ms. Rozenberg’s travel is “part of a continued [U.S.] treasury effort to engage with partners and allies around the implementation and enforcement of the unprecedented multilateral sanctions and export controls imposed on Russia for its war against Ukraine”.

The visit comes a day after Prime Minister Narendra Modi met U.S. President Joseph Biden in Tokyo on the sidelines of the Quad summit, where the two leaders announced a number of agreements.

However, New Delhi and Washington continue to have deep differences over Russia’s actions in Ukraine, as India has refused to criticise or name Moscow in any of its statements, has held at least two rounds of talks between Russian Central Bank and RBI officials on how to “stabilise” trade between the two countries in the face of U.S. and European Union sanctions, and has increased oil purchases from Russia since the war began.

According to collated reports by agencies, Indian refiners have placed orders for 40 million barrels of Russian oil in the first two months of the war, more than double the figure for all of 2021.

Indian officials have also explained that the rupee-rouble mechanism has been in existence for years, and has never been dismantled.

“What we are figuring out now is if that mechanism can be invoked in light of the global moves to check Russia,” a senior government official said on Wednesday, reiterating the decision to import more volumes of discounted Russian oil to bolster the country’s battle against runaway inflation driven by effective crude oil prices for Indian imports persistently hovering around $110 a barrel.

In March, U.S. Deputy National Security Advisor Daleep Singh had visited Delhi on a similar mission, and had said at the time that there would be “consequences” for countries that subverted the sanctions. While oil purchases are not under sanctions at present, the U.S. has reportedly begun discussions on “secondary sanctions” against foreign buyers that do not comply with U.S. sanctions by banning business with American companies and other nations that are part of the sanctions regime.

“It’s important to talk to the parts of the world that are strong U.S. partners on a whole host of other issues, and make sure we’re in close contact about our sanctions regime and working together to crack down on any evasion opportunities or evasion activities,” a U.S. treasury spokesperson said, as quoted by news agency Reuters.

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