India, Iran reach arrangement on oil payments

Feb 7, 2012, 13:50 GMT

New Delhi - India has reached an arrangement with Iran for payment for crude oil imports as US and European Union sanctions disrupted regular payment channels, news reports said Tuesday.

Indian oil companies would pay for 45 per cent of the crude imported from Iran in rupees, IANS news agency quoted Iranian ambassador to India Syed Mehdi Nabizadeh as saying.

The Iranian ambassador said the two countries had agreed to find a mechanism for payment of the remaining 55 per cent.

'This was the proposal by India and we accepted it. Both the sides are satisfied (with 45 per cent payment in rupees),' Nabizadeh said.

'All the money not paid by India last year has been paid,' the envoy added.

Nabizadeh also said that Iran's central bank had opened accounts in Indian banks, including UCO Bank Limited, to facilitate payments.

'The leaders of the two countries are determined to resolve the issue. Different ways have been found. Hopefully, we will not face any problems,' Nabizadeh said, that sanctions by the United States could not hurt Iran's relations with India.

Iran contributes about 12 per cent of India's oil imports. India has been trying to find ways to pay for the imports after the United States and European Union imposed sanctions on Iran over its disputed nuclear programme.

India had been making payments for the oil first through German-Iranian bank Europaisch-Iranische Handelsbank and later Turkey's Halkbank.

India has said it would continue to buy Iranian oil despite the sanctions.

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