Up till now India was making 45% of the payment in Euros (routed through the Turkish Halkbank) and the remaining 55% in INR (through Uco bank)
Now we will pay for all our crude purchases from Iran in INR
India imports 70% of its crude. Presently Iran accounts about 8% (down from 16%) from this figure
Quality of the iranian crude is “sweet crude” and India has set up facilities to refine it
India and 7 other economies are party to a 6 month waiver from the US-led international sanctions on Iranin exchange for their agreeing to reduce purchases of oil from Iran.
The waivers, which the State Department calls exceptions mean that financial institutions in the consumer countries do not risk being cut off from the U.S. financial system for the next six months.
The intended purpose of the sanctions is to choke funding to Iran’s nuclear program.
Iran has denied the allegations, stressing that as a committed member of the International Atomic Energy Agency and a signatory to the Non-Proliferation Treaty it is entitled to develop nuclear technology for peaceful purposes.
Implications for Indian Forex
we can save a lot of our valuable forex by paying in Rupee
since INR is not a global currency, Iran will have to spend it to buy goods from India, which is good for our exports