India, Iran working out mechanism to continue trade

New Delhi denies Washington pressure

“Officials of the RBI and the Central Bank of Iran met at the technical level to discuss various modalities for facilitating future trade transactions with Iran, including oil,” the RBI said in a statement.

Sources said the two sides are exploring a new mechanism to circumvent the ACU (Asian Currency Union) framework so that the bilateral trade could continue. They added that Letter of Credit (LCs) for trade till last two days have been cleared by the RBI.

The RBI last week asked importers of goods from Iran to settle their payments outside the ACU framework, subsequent to which payments cannot be made in dollar or euro.
Dismissing reports that it was acting under pressure, India termed as “technical”the problem in settling the current account transactions with Iran.

“This is a technical issue and the Reserve Bank of India is seized of the matter. Efforts are being made to resolve the issue as soon as possible. There is no question of India acting under pressure of any country,” the external affairs ministry said.

Iran’s deputy oil minister Ahmad Khaledi was quoted as saying by Iran’s semi-official Fars news agency: “By changing the currency for oil transaction between Iran and India the problem was solved.”

“In order to not allow Americans and Europeans to create any problem, we said let’s do our business in other currencies like (Emirate) dirham or yen,” Iran’s Khaledi was quoted as saying.

The White House, which wants governments to stop dealing with Iran because of its nuclear programme, has praised the Indian move, which came less than two months after President Barack Obama’s trip to India on which he pledged to help boost New Delhi’s global role.

Comments (+)