Working on transfer of payments with India: Iran

India is working with Iran, which has been hit by sanctions, to find a mechanism to sort out the problem of making payments in Indian currency for oil purchase, an Iranian minister said today.

The minister also asked New Delhi to make up its mind on the issue of joining Iran-Pakistan-India (IPI) gas pipeline project.

"Indian government has made a payment of Rs one billion for purchase of oil but since Indian banks have refused to part with their money and no Iranian bank has its branch here, we are working on a mechanism to deal with the situation," Deputy Minister for Asia, Oceania and Commonwealth (Central Asia) Seyyed Abbas Araghchi told reporters here.

With Reserve Bank of India in December 2010 scrapping a mechanism of settling payments through the Asian Clearing Union route, India has been paying 55 per cent of the value of oil imports from Iran in euros through Turkey's Turkiye Halk Bankasia. The balance 45 per cent of payment for crude oil was made in rupees through UCO Bank, according to sources.

Under the rupee payment mechanism, 45 per cent of the payments made by Indian oil companies for their imports from Iran, which has been hit by sanctions over its nuclear programme, were credited in rupees in the accounts of Iranian banks maintained with UCO Bank.

The visiting Minister said that IPI gas pipeline project was going on and was open to all the countries of the region to make use of it.

"It is upto India to make up its mind and join the project we believe would work in India's interest. We and Pakistan are working on it and we are serious about it. Our part is almost finished and now we are helping Pakistan in finishing their part as well. Then I think the pipeline would have capacity for the whole region," he said.

India has security concerns over the project as the proposed pipeline passes through volatile regions of Pakistan's Balochistan province. Also, there is deadlock over transport and transit fee with Pakistan.

On the allegation that Iran was behind the attack on an Israeli diplomat here in February, Araghchi, who is on a bilateral visit here, termed it as a "funny story" and said, "Why we would do that, its very cheap. Our enemy are not the Israeli diplomats.

"We condemn the attacks and we believe there is conspiracy against Iran, as same conspiracy had been repeated in Thailand."

He said Iran was eager to cooperate with India and other countries on the issue.
"We have expressed our eagerness for cooperation with all the countries including India from the very beginning. We are cooperating with Thai police, we are cooperating with other countries and India as well. They asked us about sending a police delegation to Tehran, we accepted it and welcomed them," Araghchi said when asked about reports that Iran was not cooperating in the matter.

"When they (Delhi Police team) were in Tehran, they explained the documents and fact findings done so far. We asked them to give the documents officially and we would consider them carefully and investigate those documents. We received those documents just two days ago...," he said.

When asked about the US keeping all options on the table to prevent Iran from going nuclear, Araghchi said he doesn't see any military option against Iran.

"We don't think they would start such a military operation. I think it would be the most stupid decision any President of the United States would make. I believe that there are enough wise people there to prevent such a disaster for everybody, for the American people.

"They may start a new war against Iran but it's not up to them to finish it, it's a fact. We know that they won't start a war because they know Iran's capability, Iran's abilities. They know that Iran has enough power to retaliate," the minister said.

Stressing that Iran's nuclear programme was for peaceful purposes, he said, "There is fatwa from our highest spiritual leader which says production, stockpiling and use of weapons of mass destruction are forbidden in Islam."

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