Mumbai, Dec 31 (IANS) India’s central bank Friday said it was in talks with Iran to resolve the row over oil payments, which accounts for 12 percent of its hydrocarbon imports, even as Tehran said the impasse had been resolved.
The Indian foreign office also denied US pressures for a shift in the settlement mechanism and said the matter would be resolved at the earliest.
In a statement issued late Friday, the Reserve Bank of India (RBI) said the meeting was held at a ‘technical level’ to ‘discuss various modalities for facilitating future credit transactions with Iran’.
The statement came after a meeting among officials of the central banks of the two countries in Mumbai, after the RBI had Monday banned Indian firms from using the Asian Clearing Union (ACU) to pay for oil imports from Iran.
According to Iranian officials the payments, instead of being routed through the ACU and settled using the US dollar or the European Union’s euro, can be concluded in other currencies.
The Tehran-headquartered ACU — which has India, Iran, Pakistan, Bangladesh, Bhutan, Sri Lanka, Maldives, Nepal and Myanmar as members — settles payments for intra-regional transactions among their participating central banks on a multilateral basis.
The Indian central bank had Monday barred Indian oil firms from using the ACU to pay for crude and gas imports from Iran. India — Iran’s second largest oil importer — had bought 21.3 million tonnes from the country in 2009-10 worth around $12 billion.
Iran’s Deputy Oil Minister Ahmad Khaledi was quoted as telling the semi-official Fars news agency Friday that the matter was resolved. ‘By changing the currency for oil transaction between Iran and India, the problem was solved.’
New Delhi is keen to resolve the matter at the earliest since sudden disruption of crude oil supplies from one of its largest sources — when international prices are already very high — could spell trouble for Indian industry and economy as a whole.
The RBI’s sudden move to bypass the ACU route to settle dues followed similar decisions of the American and European banks not to process payments for Iranian fuel supplies.
India denied reports that there was pressure from Washington to bar Indian firms from using the Tehran-based clearing union, and that it was a technical matter concerned the central banks of the two sides.
‘This is a technical issue and the Reserve Bank of India is seized of the matter,’ said external affairs ministry spokesperson Vishnu Prakash. ‘There is no question of India acting under pressure of any country,’ he added.
The Communist Party of India-Marxist (CPI-M) in a statement issued by its politburo had accused the government of surrendering under US pressure over the oil payment issue.
‘The decision of the central government to bar Indian companies from using the ACU to process payments will directly affect India’s trade with Iran and, in particular, will affect the import of gas and crude oil from Iran,’ the statement said.
‘The Americans have been pressurizing India as Iran’s largest trading partner in the ACU to close down this route as they consider it a barrier in the implementation of the US’s arbitrarily imposed sanctions on all companies doing trade with Iran,’ it said.
‘This decision of the government of India is a shameful surrender to US foreign policy.’
