Tuesday, May 3, 2011

India to Pay for Iran Crude in Rupee

India after trying since December to find a way to pay for imported Iranian crude oil in hard currency, and having run out of options, have decided to pay Iran for the crude in rupee. The Hindu, breaking the news in its today’s edition, said Iran still needs to approve accepting the payments in Indian currency. The National Iranian Oil Company (NIOC) would then open rupee account with Indian banks, with several limitations on how it can use the funds:

  • NIOC could use the money to purchase non-strategic/non-military items such as railway imports or commodities.
  • NIOC will not be able to use the monies to invest in India or to buy shares or companies.
  • India’s Finance Ministry will prepare and submit a list of do's and don'ts for Iranian authorities from the money it gets as part of the crude oil payments.

In February, India started making euro payments through an Iranian bank based in Germany, Europisch-Iranische Handelsbank AG (EIH Bank). But that had to be stopped soon after the German government put an end to the practice. The Indian government also explored the option of opening accounts in Dubai-based Noor Islamic Bank for direct transfer of money to Iran. But the UAE also refused to route payments to Iran [The Hindu, 3 May].

India imports 12 million barrels of crude oil every month from Iran.


Anonymous said...

maybe better this solution
I believe the currency like Rupee,
Yan(china) and real(Brazil) will rise against Euro or $

Gifted one said...

in my (very) humble opinion i think that Iran should bet against the dollar, and for the rupee. India has just raised it's interest rate to 7.15% to combat the inflation being spread worldwide by excess US dollars flooding the world currency/commodity markets. In the long run the value of the rupee will have to go up to both combat inflation, and the stop the buying of a declining US dollar. In other words the value of the Iranian investment in the Indian currency should rise over time.

Anonymous said...

This is stupid and insulting to say the least..So let me get this straight. India buys their much needed oil from Iran and then tell Iran what she can and cannot use the money for??? Even worse, they want Iran to use the money to buy Indian shares or invest that hard earned cash in India!!!I'm I reading this right?

Iran should just make sure India clear all their outstanding payment and close the account..They should demand solid gold as payment for any future purchases if that's what it should be..If they don't like it they can go buy from Saudi Arabia and set those same conditions for them also...Sick!!!

It disgust me when a country the size of India have such coward politicians that take their marching orders from Washington...Heck, they can't even feed their own people for kebab sakes!!!

Maybe they should start thinking of using curry to power their cars and economy.

Alborz said...

Anno May 4, 2011 8:29 AM

you misunderstand the Problem.
The indian wants to pay in $ or Euro. but they can not.

for $ odr € payment you need US or European accounts and Banks.
The UAS/EU goverment do not allow their banks to broker the india-iran oil deal.
just like last time in Germany.
German Government prohibitted broking iran- inida deal