Iran keen to sell more oil to India, seeks payment resolution
Keen to sell more crude oil to India, Iran`s Industry Minister Mohammad Reza Nematzadeh today sought resolution of payment issues to promote trade between the two nations.
Bali: Keen to sell more crude oil to India, Iran`s Industry Minister Mohammad Reza Nematzadeh today sought resolution of payment issues to promote trade between the two nations.
"We talked (with Commerce Minister Anand Sharma) mainly on economic issues...Unfortunately due to banking problems, the volume of trade had declined. We hope RBI will solve this as trade without banking relations will not grow," Nematzadeh said on the sidelines of the ongoing WTO Ministerial Conference.
Iran "has more crude oil. We need to find ways and means to sell more," he said after a bilateral meeting with Sharma. Due to sanctions on Iran, India has cut imports from the Persian Gulf nation from 21 million tonnes to about 18 million tonnes in 2011-12 and to 13.1 million tonnes in 2012-13. This year imports are planned at 11 million tonnes.
However, the historic accord between western super powers and Iran will make it easier for India to import oil from the Persian Gulf state.
Pitching for normal banking relations, Nematzadeh said, Indian banks should work with Iranian banks on letters of credit. "We have commited to spend 45 per cent of our oil export earnings from India to buy goods and services from India and rest 55 per cent is payable in euro...But due to the banking problem we are unable to utilise it," he added.
India is looking forward to restarting payments in foreign currency. The easing of sanctions following a deal to curb Tehran`s nuclear programme last month, may reopen the channel to pay for Iranian oil in euros, while European Union lifts ban on insuring tankers carrying oil from the Persian Gulf state.
"This (fiscal) year, we had planned 11 million tonnes of crude oil imports from Iran and we will stick to that. Because it is not easy to keep changing your contracts on short notice and (raising volumes) would mean bringing in more ships and other arrangements," Oil Secretary Vivek Rae told reporters recently in New Delhi.
Rae had also indicated that India would look forward to importing more crude oil from Iran once all sanctions are lifted. "Iran is a great source of oil and gas and once problems faced by Iran are resolved, we will have more oil and gas from Iran," he had said.
India had since July 2011 paid in euros to clear 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 per cent due amount was remitted in rupees in accounts Iranian oil company opened in Kolkata-based Uco Bank. Tougher sanctions blocked the payments in euro through Turkey from February 6 this year but the rupee payments for 45 per cent of the purchases continued through Uco Bank.