Iran has agreed to accept 45 per cent of the payment for its crude imports in rupees through three Indian banks to beat the effect of western sanctions.
Assuring against any cut in crude supplies, Iranian Ambassador Syed Mahdi Nabizadeh told newspersons here on Tuesday that despite frequent U.S. roadblocks and pressure on European financial institutions through which India has been routing payments, both countries were determined to resolve the issue of payments for India's crude imports.
The two countries had had agreed on part payment in rupees as gold was not a suitable option.
“Fortunately, a suitable mechanism has been found by the two countries. Officials of both countries met last week and both the Central Bank of Iran and the Reserve Bank of India are happy with this arrangement. This mechanism is agreeable to both countries,'' he said.
Under the agreement, 45 per cent of the payment would be made in rupees through three Indian banks and Iran could utilise this for buying Indian machinery, metal products, iron, steel, minerals, clothes, fibre, sugar, tea, wood and automobile spare parts. Indian companies can also invest in projects in Iran like developing its oil and gas fields, extraction of iron ore and building roads and railways.
The envoy said the dominant opinion in Tehran was to continue supplying India with about $1 billion of crude although some had counselled cutting supplies because India had fallen behind in payments due to western sanctions.
He did not think Tehran would be able to reduce the price of crude it supplied to India because rates were benchmarked on internationally uniform basis.
“The oil price is determined internationally. We cannot take a decision on our own. It is based on several factors,'' he said.
The Ambassador said Iran could extend the one-month deadline given to India on progressing with the Farzad-B gas field.
As first reported by The Hindu , the first round of talks after two years was held in September last year for five days on Iran's Kish Island. But after negotiating the main part of the contract, India did not agree to hold the next meeting in November when issues of internal rate of return and security of investment were to be discussed.
Oil and Natural Gas Corporation (ONGC) and Indian Oil hold 80 per cent stake in the block and Oil India the remaining 20 per cent. India had reluctantly gone for the talks after Iran said it was planning to shift the project to an Iranian consortium and offered only a 30 per cent stake to the ONGC.
