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India will be able to pay for a “significant” portion of the crude oil that it imports from Iran through a barter system.
Sources said that this option could “kick in” if sanctions were imposed on Iran. “Only time will tell whether there is necessity to follow this process,” official sources told Business Line .
India had to consider various ways of paying for oil imports from Iran following the US imposing sanctions. On Monday, the European Union also agreed to impose sanctions on Iran that will become fully effective from July.
Official sources, while confirming the development, refused to be drawn into specifics on what amount of Iranian oil will be covered through the barter trade system.
“There will be no official-level delegation visits now, at least not on this issue. The banks on the two sides will now see how to take the issue forward. The Indian side will also have to see what are the items which Iran will be interested in importing from here,” official sources said.
The availability of the barter option means India will not have to consider seeking a waiver from the US, which many feel is a “complicated” and short-term solution as the exemption is given for a limited period, sources said.
Iran accounts for about 12 per cent of India's oil imports, and is next only to Saudi Arabia. India imports about 4,00,000 barrels a day of crude from Iran and the monthly payment is around $1 billion. At present, India pays for Iran oil imports in foreign exchange.
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