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Iran working with India to resolve oil payment

Posted on Oct 16, 06:57PM | IANS

Sanctions-hit Iran Tuesday said it was working with India to find a mechanism to resolve the problem of paying for Iranian oil in Indian currency and urged New Delhi to make up its mind on joining a tri-nation pipeline.

"The Indian government has made a payment of Rs.1 billion for purchase of oil but since Indian banks have refused to part with their money and no Iranian bank has a branch here, we are working on a mechanism to deal with the situation," Iran's Deputy Minister for Asia, Oceania and Commonwealth (Central Asia) Seyyed Abbas Araghchi told reporters here.

For nearly two years, India has been paying for its 55 percent of oil imports from Iran in euros through Turkey's Turkiye Halk Bankasia.

Despite the Western sanctions on Iran, India in February sealed a payment mechanism under which Indian firms will pay for 45 percent of their crude oil imports from Iran in rupees. This payment by Indian companies is credited in rupees in the accounts of Iranian banks maintained with UCO Bank.

In December 2010, the Reserve Bank of India scrapped a mechanism of settling payments through the Asian Clearing Union route.

Araghchi also asked India to take a decision on joining the multi-billion dollar Iran-Pakistan-India gas pipeline and underlined that it was a project that would benefit the entire region.

"It is up to India to make up its mind and join the project we believe would work in India's interest. Iran and Pakistan are working on it and we are serious about it," he said.

"Our part is almost finished and now we are helping Pakistan in finishing their part as well. Then I think the pipeline would have capacity for the whole region," he said.

India has security concerns over the pipeline as it will pass through violence-prone Pakistan's Balochistan province. Besides, India has to also sort out the deadlock over transport and transit fee with Pakistan.