JOIN USIran has agreed to take all oil payments from India in rupee after the US and western sanctions blocked other payment routes and a Russian route to make payments in Roubles did not work out.
India has to settle its $1.53 billion dues with Iran in rupees. Until February this year, 45 per cent of the Indian oil import payments were made in euros, with the money going through Turkish Halkbank.
Since then, Indian crude oil importers have held on to their payments. A Russian route to make payments in Rouble was explored, but it did not work out, leaving the rupee transactions as the only alternative, official sources said.
The UCO Bank is the only designated Indian institute under the rupee-payment mechanism with Iran. It is backed by its tie-ups with five Iranian banks which worked on carrying out the process of settlements of dues in April last year.
Since April 1, Indian refiners have held on to 55 per cent of payments as Iran has been exploring avenues. Now, with Iran agreeing to rupee payments, oil refiners are expected to pay their dues soon.
India imports about 70 per cent of its crude oil from abroad. In June, India along with a few Asian countries managed another six-month waiver from the United States, under which they have agreed to reduce their oil imports from Iran. Last year, India imported around 2.6 lakh barrels of oil per day, which was a reduction of 27 per cent