India will deposit payments for imported crude oil from Iran into accounts of five Iranian banks, after the two nations agreed on a payment mechanism to overcome US sanctions, people with knowledge of the matter told Bloomberg.
All spending will be in Indian rupees, the report stressed.
Iran will use part of the deposits for purchasing essential goods from India and to meet expenditure incurred by its diplomatic missions in the South Asian nation, the people said, asking not to be identified because the information isn’t public.Continued supplies is crucial for India, a country that imports nearly 80 percent of its annual crude requirement, as Tehran offers better credit terms than other Middle East oil producers and, in the past, has accepted payments in Indian rupees, rather than US dollars.
The south Asian nation purchased crude worth about $9 billion from Iran in the financial year ended March 31.
Earlier this month, it was announced that Iran and South Korea agreed on a similiar mechaism to continue bilateral trade in the face of newly-reimposed US sanctions. Furthermore, the European countries have also promised a Special Purpose Vehicle (SPV) to condinue doing business with Iran, on which the Europeans are still working.
KI/PR