Skip to comments.Iran asks India to settle all oil payment in rupees
Posted on 07/11/2013 10:42:03 AM PDT by DeaconBenjamin
NEW DELHI: Iran has asked India to settle all oil trade including $1.53 billion owed to Tehran in the partly convertible rupee as the sanctions-hit nation cannot find an alternative payment channel, industry and government sources in Delhi said.
India has been paying for 45 per cent of its Iranian oil imports in rupees, which has limited international acceptability, and was settling the remainder in euros through Turkey's Halkbank, but this was halted in February under pressure from tighter western sanctions.
The US and European Union slapped sanctions on Iran to block oil revenues over its disputed nuclear programme, which they suspect aims to build weapons. Iran denies this claim.
Since April 1, Indian refiners have held on to 55 per cent of payments as Iran has been exploring avenues, including settling in roubles through Russia, the sources said. The non-payment was seen as a hidden incentive or a temporary relief on top of attractive credit terms offered by Iran to Indian clients.
"The Russian route didn't work out so they have asked us to make the entire payment, including dues, in rupees and we have no problems in that. Soon we will start clearing the dues in rupees," said an official at an Indian refiner.
The two countries had been trying to reduce New Delhi's debts by promoting exports and India recently said it would allow goods to be imported for re-export to Iran as long as they added value of at least 15 per cent, to encourage trade.
India imported 262,800 barrels per day (bpd) from Iran in 2012/13, a reduction of 27.4 per cent from the previous year, according to preliminary government data.
New Delhi, along with other Asian clients of Iran, won another 180-day waiver from the US sanctions last month on the back of its cuts in imports from Tehran.
“Very much no problem, sir! Rupees it is!”
It’s their funeral.