Iran is ready to meet India’s energy security needs, the Indian ambassador said on Friday as negotiations between world powers and Tehran continue to lift sanctions against the OPEC member.
Iran was India’s second-largest oil supplier, but New Delhi had to suspend imports from Tehran when former US President Donald Trump withdrew from a nuclear deal with Iran and re-imposed sanctions on its oil exports.
“The rupee trade mechanism can help companies in both countries deal directly with each other and avoid the costs of third-party intermediation,” said Ali Chegeni of the MVIRDC World Trade Center in India.
India, the world’s third largest oil importer and consumer, covers more than 80% of its crude oil needs with imports.
India and Iran devised a kind of exchange mechanism to consolidate trade, where Indian refineries paid Iranian oil in rupees to a local bank and the funds were used by Tehran to pay for Indian imports.
Due to the sanctions, India-Iran trade fell sharply from $ 17 billion in fiscal year to March 2019 to less than $ 2 billion in April-January in the first 10 months of this year.
Chegenik said: “If both countries put in place the rupee trade mechanisms, bilateral trade could reach $ 30 billion.”