India looks at euro, yen to resolve Iran oil issue
India is looking at alternative currencies, including the Euro, Yen and Dirham to make payments to Iran for oil imports and end the current impasse, financial services secretary R Gopalan said on Tuesday.
We have to work out some other currency through which payments can be made. An Indian delegation consisting of officials from the finance ministry, Reserve Bank of India and State Bank of India will visit Tehran on Friday to find a solution. Additional secretary in the finance ministry Rakesh Singh will be heading it, he said.
Iran is Indias second largest crude oil supplier. However oil imports from there have been hit after the RBI on December 23 said that all trade related payments to Iran had to be made outside the Asian Clearing Union (ACU), a regional payment mechanism that allowed companies to skirt US and European restrictions on doing business with the Middle East country. The move has been opposed by the Gulf nation.
Under the ACU mechanism, payments are made in Euro or US Dollar. Since the RBI circular, the two countries have been unable to find an alternative payment mechanism.
The government has however ruled out the Indian Rupee as an alternative payment option. There is a problem of build-up like what we saw in the rupee-rouble trade with Russia, Gopalan said.
However, payments in Euro can still be made provided a certificate is given that imports are for oil only. But it is still not clear as to who will give the certificate.
India looks at euro, yen to resolve Iran oil issue