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Iran unlikely to push India for oil dues quick fix

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New Delhi (Big Wire) Iran is unlikely to put pressure on India to settle about $6.5 billion dues of oil imports as the Persian Gulf nation is committed to business with the South Asian country on a long-term basis, said Gholamreza Ansari, the Iranian Ambassador.

The western countries, led by the United States, had imposed economic and trade sanctions on Iran in early 2012 for its ambitious nuclear programme. iranian

He said Iran recognises India’s helpful approach during the period of sanctions, despite huge pressure to abandon ties with it.

On Jan. 17, leading world powers including the US, announced the lifting of the sanctions against the Islamic Republic as it had agreed to comply with a deal that clipped its nuclear ambitions.

Officials of the Central Bank of Iran (CBI) visited India post lifting of the sanctions.

They met officials of India’s Finance Ministry and the Reserve Bank of India (RBI) to ease out modalities for settling the oil import dues.

With the lifting of sanctions, a three-year-old mechanism of Indian buyers paying 45 percent of oil import bill in rupees and keeping the rest 55 percent pending for payment channels to clear, came to an end.

This month, India’s Oil Minister Dharmendra Pradhan and Foreign Minister Sushma Swaraj visited Tehran to expedite the settlement process and ensure uninterrupted oil supplies from the third-largest producer within the Organisation of the Petroleum Exporting Countries (OPEC).

Indian refiners imported around 506,000 barrels per day (bpd) from Iran in March, the highest in almost five years, after purchases ramped up, post lifting of sanctions.

The country is expected to import at least 400,000 bpd of Iranian oil in the new fiscal year that began from April 2016, said trade sources.Iran_map“We want to do business with this money – whether with India or other countries,” said Ansari, echoing a paradigm shift in the country’s erstwhile belligerent approach to do business with the rest of the world, at an interaction with members of the Foreign Correspondents’ Club of South Asia (FCC).

The Ambassador said terms of the settlement with the powerful nations that were party to the sanctions have come on the way to an early solution to the oil import dues imbroglio. Iran prefers reverting to the pre-sanction mechanism of settling oil import dues through the Asian Clearing Union (ACU), he added.

“We are not in a hurry to take the money out,” the Ambassador said at the media interaction on Thursday late evening.

Ansari said that his country was more interested in promoting the business of Liquefied Natural Gas (LNG) with Indian companies and shied away from commenting on the prospects of developing oil pipelines from Iran to India via Pakistan.

To promote bilateral trade ties, Ansari said the strategically located Chabahar Port in the Gulf of Oman would promote India’s connectivity to do business with the Gulf, Central Asia and Europe. In the nineties, India had partially built the port that provides trade access to Afghanistan and Central Asia, bypassing Pakistan.

Once, connectivity is established via Chabahar Port, India can export goods to North Europe as well, at nearly 40 percent lower than current rates, the diplomat added.

To a query on the timeline for Prime Minister Narendra Modi’s visit to Tehran, Ansari said it would be better for bilateral relations, if such a visit takes place sooner, though he had no concrete idea to share about the timeline for such a visit.

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(Ratnajyoti Dutta, a former Reuters journalist, is the New Delhi-based Consulting Editor of Big Wire)

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