India to send delegation to Tehran to sort oil import impasse

An Indian delegation will visit Tehran on January 14 to decide on payment options for Iranian oil import in the wake of a controversy over the matter following US sanctions on the Persian Gulf nation for its nuke programme.

"The delegation will go on January 14," Financial Services Secretary R Gopalan said.

He said, "we have to work out some currency other than dollar in which payments could be made (for Iranian oil)."

On December 23, the RBI 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 West Asia country.

The move has been opposed by the Gulf nation.

The routing of payment outside ACU, is aimed at meeting the concerns of US which fears the money via this route could be utilised by the Iranian government for its nuclear programme.

In ACU mechanism, payments are made in Dollar or Euro.

Gopalan said options are to settle the payment in Euro, Yen and Dirham.

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 imports 12 million barrels of crude oil every month from Iran. Iran accounts for 12 per cent of India's supplies and is its second-largest supplier behind Saudi Arabia.