NEW DELHI: India is having a look to revive a rupee trade mechanism to settle a part of its oil bills to Iran, fearing international channels to pay Tehran would possibly choke below drive from US sanctions, two government sources said.
During a prior round of sanctions, India devised a barter-like scheme applicable to Washington to allow it to make some oil bills to Tehran in rupees thru a small state bank. Iran used the funds to import items from India.
"We are looking at reviving rupee mechanism ... we have to prepare ourselves," probably the most sources told Reuters, including that the present fee mechanism would possibly no longer paintings from November.
A trade ministry professional said India's central bank had but to come to a decision on transferring back to the rupee fee mechanism.
In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the reimposition of US sanctions.
Some US sanctions take impact from Aug. 6 while the ones, significantly affecting the oil sector, shall be efficient from Nov. four.
Refiners in India recently use State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG (EIH) to buy Iranian oil in euros, in step with IOC and other firms.
SBI, India's most sensible banker, has written to the Indian refiners and the federal government to say it will no longer be capable to deal with oil bills to Iran from Nov four, an professional at SBI said.
India refiners receive a 60-day credit length for bills to Iran, suggesting oil imports from Iran could be hit from August.
The Indian government has no longer requested its refiners to cut Iranian oil imports, however some companies have began lowering purchases from Tehran.
"So far we don't know what we are expected to do. We have not asked refiners to cut imports," the source said, including an professional meeting between India and the United States to speak about Iran sanctions had no longer but taken place.
An Indian delegation visited officers and bankers in France, Germany, Britain and Brussels, the bottom for the European Union, to seek out selection fee routes, the source said, including it had discovered it will be "almost impossible to use European banks for payment to Iran."
Restarting the rupee fee mechanism would lend a hand fix a trade balance tilted in favour of Iran.
India's trade deficit with Iran narrowed from $11.four billion in the monetary year 2011/12 to about $3.6 billion in 2015/16, when the former rupee fee mechanism was once in place. Since then, it widened to about $eight.5 billion in 2017/18, trade ministry figures show.
During a prior round of sanctions, India devised a barter-like scheme applicable to Washington to allow it to make some oil bills to Tehran in rupees thru a small state bank. Iran used the funds to import items from India.
"We are looking at reviving rupee mechanism ... we have to prepare ourselves," probably the most sources told Reuters, including that the present fee mechanism would possibly no longer paintings from November.
A trade ministry professional said India's central bank had but to come to a decision on transferring back to the rupee fee mechanism.
In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the reimposition of US sanctions.
Some US sanctions take impact from Aug. 6 while the ones, significantly affecting the oil sector, shall be efficient from Nov. four.
Refiners in India recently use State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG (EIH) to buy Iranian oil in euros, in step with IOC and other firms.
SBI, India's most sensible banker, has written to the Indian refiners and the federal government to say it will no longer be capable to deal with oil bills to Iran from Nov four, an professional at SBI said.
India refiners receive a 60-day credit length for bills to Iran, suggesting oil imports from Iran could be hit from August.
The Indian government has no longer requested its refiners to cut Iranian oil imports, however some companies have began lowering purchases from Tehran.
"So far we don't know what we are expected to do. We have not asked refiners to cut imports," the source said, including an professional meeting between India and the United States to speak about Iran sanctions had no longer but taken place.
An Indian delegation visited officers and bankers in France, Germany, Britain and Brussels, the bottom for the European Union, to seek out selection fee routes, the source said, including it had discovered it will be "almost impossible to use European banks for payment to Iran."
Restarting the rupee fee mechanism would lend a hand fix a trade balance tilted in favour of Iran.
India's trade deficit with Iran narrowed from $11.four billion in the monetary year 2011/12 to about $3.6 billion in 2015/16, when the former rupee fee mechanism was once in place. Since then, it widened to about $eight.5 billion in 2017/18, trade ministry figures show.
'India looks to revive rupee payment system for Iran oil imports'
!['India looks to revive rupee payment system for Iran oil imports']()
Reviewed by Kailash
on
June 22, 2018
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