Ready to meet India's energy security needs, says Iran envoy

Due to sanctions, India-Iran trade suffered a sharp drop from $17 billion in the fiscal year to March 2019 to less than $2 billion in April-January, the first ten months of the fiscal year.

Team Newsable

New Delhi, First Published Mar 18, 2022, 5:45 PM IST | Last Updated Mar 18, 2022, 5:45 PM IST

Iran's ambassador on Friday was quoted stating that Iran is to ready meet India's energy security needs, as talks continue between the world powers and Tehran on the lifting of sanctions against the OPEC member.

Iran was India's second-largest oil supplier; however, New Delhi had to halt imports from Tehran after former US President Donald Trump withdrew from the nuclear deal with Iran and re-imposed sanctions on its oil exports.

Ali Chegeni was quoted as stating by the Indian facilitation body MVIRDC World Trade Centre that the rupee-rial trade mechanism can aid companies from both countries to deal with each other directly and avoid the third-party intermediation costs.

The world's third-biggest oil importer and consumer is India, which covers over 80 per cent of its crude oil need with imports.

To settle trade, India and Iran created a barter system in which Indian refiners paid for Iranian oil in rupees to a local bank, and Tehran used the cash to pay for imports from India.

Due to sanctions, India-Iran trade suffered a sharp drop from $17 billion in the fiscal year to March 2019 to less than $2 billion in April-January, the first ten months of the fiscal year.

Chegeni stated that if both countries launch rupee-rial trade mechanisms, the bilateral trade could grow to $30 billion.

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