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New Delhi will pay Iran in Indian currency for crude
Amid deepening US sanctions on Iran, New Delhi and Tehran have worked out a mechanism for the payment of oil imports from the country. Iran’s envoy to India said on Tuesday, 45 per cent of the overall crude oil payment can be paid in rupees as part of the mechanism agreed between the two.
“Good mechanism has been found in the meetings of the two sides for payments. All the pending payments in the last year have been paid by India,” Sayed Mehdi Nabizadeh, Iranian Ambassador to India said.
Leaders of the countries are determined to resolve this issue and the present mechanism is agreeable to both sides, Nabizadeh said pointing that trade is going normal as per the demand of the Indian companies.
Sources told The Pioneer that the two countries want that everything related to the payment of crude oil should be done through the banking system. Iran has agreed upon three Indian banks to accept nearly half of payment for its crude imports in rupees with both countries formulating mechanisms to avoid any problems in the future in the wake of western sanctions. Iran can use the money for buying machinery, metal products, iron, steel, minerals, clothes, fibre, sugar, tea, wood and automobiles in India, among others.
The envoy also said that the two sides had agreed on part payment in rupees as gold was “not a suitable option”.
“Officials of both countries met last week and both the Central Bank of Iran and Reserve Bank of India are happy with this arrangement. This mechanism is agreeable to both countries,” he said.
New Delhi buys 12 per cent of its oil needs from Tehran, worth about $11 billion annually. India imported about 22 million tons of crude oil valued at about $10 billion in 2009-10, which makes it the third largest market for Iranian crude.
Despite sanction and pressure on crude oil trade, envoy said Iran wont give any concessions to India explaining oil prices is an international issue and should be equal for all.
Amid deepening US sanctions on Iran, New Delhi and Tehran have worked out a mechanism for the payment of oil imports from the country. Iran’s envoy to India said on Tuesday, 45 per cent of the overall crude oil payment can be paid in rupees as part of the mechanism agreed between the two.
“Good mechanism has been found in the meetings of the two sides for payments. All the pending payments in the last year have been paid by India,” Sayed Mehdi Nabizadeh, Iranian Ambassador to India said.
Leaders of the countries are determined to resolve this issue and the present mechanism is agreeable to both sides, Nabizadeh said pointing that trade is going normal as per the demand of the Indian companies.
Sources told The Pioneer that the two countries want that everything related to the payment of crude oil should be done through the banking system. Iran has agreed upon three Indian banks to accept nearly half of payment for its crude imports in rupees with both countries formulating mechanisms to avoid any problems in the future in the wake of western sanctions. Iran can use the money for buying machinery, metal products, iron, steel, minerals, clothes, fibre, sugar, tea, wood and automobiles in India, among others.
The envoy also said that the two sides had agreed on part payment in rupees as gold was “not a suitable option”.
“Officials of both countries met last week and both the Central Bank of Iran and Reserve Bank of India are happy with this arrangement. This mechanism is agreeable to both countries,” he said.
New Delhi buys 12 per cent of its oil needs from Tehran, worth about $11 billion annually. India imported about 22 million tons of crude oil valued at about $10 billion in 2009-10, which makes it the third largest market for Iranian crude.
Despite sanction and pressure on crude oil trade, envoy said Iran wont give any concessions to India explaining oil prices is an international issue and should be equal for all.
