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Amidst the US sanctions to continue undisrupted crude oil supplies from Iran, India will pay for 45 per cent of its transactions in rupee terms.
Mr Seyed Mehdi Nabizadeh, Iranian Ambassador to India, said that Iran and India have reached a suitable payment mechanism for Iranian oil imports. While 45 per cent of the payment for oil imports from Iran will be made in rupee, the remaining will be through any other mode, he said.
The other mode of payment may not necessarily be through the existing Turkey route.
India and Iran have been working out a suitable payment mechanism for Iranian oil. After the meetings between officials of the Reserve Bank of India and the Central Bank of Iran, both have reached an agreeable percentage and both sides are satisfied, he said.
Iran’s central bank has opened an account with Indian banks including UCO Bank to facilitate the payment. As a payment mechanism, he said, Iran can use the rupee returns for buying commodities and products from India.
Indian companies will also invest in projects in Iran, such as developing its oil and gasfields, extraction of iron ore, and building roads and railways.
Iran may also increase its imports of goods from India to settle part of the payments, he said.
Uncertainties over the supplies from Iran emerged when, in December 2010, the Reserve Bank of India scrapped payments to Iran using the long-standing clearing house system run by Asian central banks.
Iran is India's second-biggest crude oil supplier after Saudi Arabia meeting about 12 per cent of the country’s import needs. He said, there will be no stoppage in oil imports from Iran.
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