(Reuters) – 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 percent of its Iranian oil imports in rupees, which has limited international acceptability, and was settling the remainder in euros through Turkey’s Halkbank (HALKB.IS), but this was halted in February under pressure from tighter western sanctions.
The U.S. 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 percent 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 percent, to encourage trade.
India imported 262,800 barrels per day (bpd) from Iran in 2012/13, a reduction of 27.4 percent 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 U.S. sanctions last month on the back of its cuts in imports from Tehran.
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