Iran is ready to meet India’s energy security needs, its ambassador to India was quoted as saying on Friday, as negotiations continue between the world powers and Tehran on the lifting of sanctions against the OPEC-member.
Iran used to be the second largest oil supplier to India but New Delhi had to halt imports from Tehran after former U.S. President Donald Trump withdrew from the nuclear deal with Iran and re-imposed sanctions on its oil exports.
“Rupee-rial trade mechanism can help companies from both the countries to deal with each other directly and avoid third party intermediation costs,” Ali Chegeni was quoted as saying by Indian facilitation body MVIRDC World Trade Center.
India, the world’s third biggest oil importer and consumer, covers over 80% of its crude oil needs with imports.
India and Iran had devised a barter-like mechanism to settle trade where Indian refiners were paying for Iranian oil in rupees to a local bank and the funds were used by Tehran to pay for imports from India.
Due to sanctions, the India-Iran trade declined sharply from $17 billion in the fiscal year to March 2019 to less than $2 billion in April-January, the first 10 months of this fiscal year.
Chegeni said, “If both countries launch rupee-rial trade mechanisms, the bilateral trade could grow to $30 billion”.