Iran agrees to accept payment in rupee
Even as India and Iran have resolved their longstanding issue of payments for export shipments, a high-level delegation of Indian officials, including businessmen, will head towards Tehran on March 10 to explore the massive business potential in view of sanctions by the U.S. and the European Union.
Both India and Iran have agreed to accept payment in rupee form, a move that could unlock huge sums pending on both sides. The delegation will be in Iran from March 10 to 14 and hold meetings with officials and the business world to explore the potential areas where India could become a partner or a stakeholder in the future. “There is a huge business potential in Iran and a delegation from India would be soon visiting there to tap that huge opportunity,” Commerce Secretary Rahul Khullar had said last month.
“The payment problem with Iran has been resolved with operationalisation of the rupee payment mechanism through UCO Bank. The payments which have been stuck in the past
There is a huge business potential in Iran and a delegation from India would be soon visiting there to tap that huge opportunity
will be cleared expeditiously,” Federation of Indian Export Organisations (FIEO) president Rafeeque Ahmed said in a statement on Friday.
Mr. Ahmed felt it was a very positive step by the government and it would encourage exporters to aggressively export to Iran and optimise utilisation of rupee balance in oil import pool.
The Department of Financial Services has asked the FIEO to bring before the government cases where an exporter is facing payment problem with regard to export to Iran.
Following the resolution of the payment issue, the Indian business delegation will be able to negotiate new contracts with their Iranian counterparts. The Directorate- General of Foreign Trade (DGFT) has also agreed to grant all benefits to exports for which the payment is received in rupee and a notification will be issued soon.
The problem with Iran began after the Reserve Bank of India in December 2010 withdrew the Asian Clearing Union (ACU) mechanism under which payments were made to Iran.
India imports 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia.
After the scrapping of the ACU mechanism, Iran, which makes up for over 12 per cent of India's oil needs, had continued to supply oil on credit despite the outstanding amount crossing $3 billion. India is also one of the biggest importers of crude oil from Iran, and imports around 12 per cent of its crude oil requirement from Tehran.
(The Hindu)