Even as the issue of payment for crude oil purchased from Iran remained unresolved, a Reserve Bank of India (RBI) team will visit Tehran to work out a solution.
On its part, Iran has promised India that it will not disrupt the supply of oil despite no payments going through during the last one month.
The decision to send an RBI team to Iran was taken after the government got feedback from the 14-member team led by a senior official of the Finance Ministry which returned after holding extensive talks with officials of Iran's National Iranian Oil Company.
The RBI team will explore a new conduit for payments towards Iranian crude oil imports, and will meet Deutsche Bundesbank officials to find an alternative mode of payment.
There has been no disruption in supplies from Iran since December 23 last year, when the RBI clamped down on the main conduit Indian companies use to pay for the consignments.
Iran has conveyed to the Indian delegation its readiness to continue selling crude oil on credit, pending resolution of the deadlock. However, it has asked Indian authorities to work out a resolution on the payment issue at the earliest.
Petroleum Secretary S. Sundareshan said Iran was selling crude oil to Indian refiners on open credit after the RBI closed the Asian Clearing Union (ACU) route, a move that barred settlement in dollars and euros.
India has asked Iran to identify a panel of banks that are not under U.S. sanctions, to route payments to the National Iranian Oil Company (NIOC). Officials said the State Bank of India has turned down the request to route payments through the Hamburg-based EIH Bank, which Iran had identified as a temporary channel for routing money to the NIOC.
Various options are being worked out to facilitate the payment. The RBI has expressed its reservations over allowing any payment in the rupee mode.
Another option being mooted is that India could write to the European Union seeking exemption from the certification process required for imports from Iran. It is felt that at a later date, the ACU could recognise a currency other than the dollar and the euro.
Till October 2010, transactions between India and Iran were carried out in the euro mode through the ACU, which was set up in 1974.
Iran is India's second largest crude oil supplier, after Saudi Arabia, meeting more than 12 per cent of the country's needs. In the absence of a mutually acceptable payment mechanism, India may not be in a position to import 10 million barrels of crude oil from Iran next month.
