New US sanctions create panic, India’s oil imports from Iran could be hit hard from Feb 6

oilNEW DELHI: India’s oil imports from Iran could take a severe knock as a new set of US sanctions kick in from February 6. India will no longer be able to route oil payments to Iran through the Turkish Halk Bank that has been the norm over the past couple of years.

Instead, India will have to pay for Iranian oil in local currency which will have to be kept in an Indian bank. India already pays 45% of its oil payments in rupees, which is kept in UCO Bank. After February 6, Iran will not be allowed to repatriate its foreign earnings except to buy goods from the country concerned. This could prove to be a problem all by itself particularly as Iran now has over $5 billion in rupees in the bank.

The new set of sanctions come about as a result of the amendments to the Iran Threat Reduction and Syria Human Rights Act of 2012 ( ITRSHRA) by the US treasury department. For the first time, a US company can be penalized if its foreign subsidiary is found to be dealing with Iran government entities. This will extend the scope of the sanctions regime to even tertiary players in the international market.

By The Times of India

 

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