Vivek Rae in New Delhi on Tuesday. (PTI)
New Delhi, Oct. 1: India and Iran are exploring ways to resolve the payment impasse over crude oil, including settlement in other currencies such as the Russian rouble, Japanese yen or Chinese yuan.
Tehran has refused a rupee deal.
“Initially, we thought they (Iran) will be taking it (all payments) in rupees, but there is some reluctance on their side particularly after the change of government there,” oil secretary Vivek Rae told reporters here.
He said after the sanctions by western nations blocked all other payment routes, Iran had raised a few invoices for oil it sold to India in rupees but stopped doing so soon after.
It has reverted to the old system of taking only 45 per cent of the payments due in rupees and for the rest it is seeking payments in rouble, yen or yuan.
India wants to buy 11 million tonnes of crude oil from Iran in the current fiscal, over 15 per cent lower than 13.1 million tonnes imported from the country in 2012-13.
The finance ministry, he said, is looking into the issue, and officials may travel to Tehran to resolve the impasse. Alternatively, Iranian officials may visit New Delhi.
Rae said India was hopeful that the system of full payments in rupees would resume as it would help save on forex outflow.
There is also a need to put in place a mechanism for utilisation of the accumulated rupee balances in the Iranian accounts held with the Uco Bank. Balances are about Rs 20,000 crore, at present.
For this, India could increase exports to Iran or the Iranian government could invest in infrastructure projects in India.
Rae said the oil ministry was neutral to the form of payment to Iran and it was for the finance ministry to decide on the mode.
However, Iran being permitted to open foreign currency accounts in India may attract US sanctions, as eventually foreign currency accumulations would move out of the country for the purposes of Iran’s trade.
Oil imports have been the biggest factor contributing to a record current account deficit.