The underestimation has to do with the Western narrative of how badly the Iranian economy was hit by sanctions and how marginalized Iran was politically due to its controversial nuclear program.
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The talks accelerated after a nuclear agreement between Tehran and world powers in July paved the way to lifting sanctions. “The modalities of instalments and the route are being worked out”, he said.
New Delhi is paying 45% of the debt in rupees through the Uco Bank in the form of goods and commodities which it sells to Iran. The official said the repayment may happen through the Reserve Bank of India (RBI).
The balance has been accumulating, pending finalisation of a payment route and mechanism.
Iran has asked India to clear $6.5 billion in an outstanding debt within two months, a top Indian official said on Thursday, quoted by the country’s media.
For new payments in rupees, Iran will open a new account with a separate Indian bank because Tehran wants the settlement to be made to “an interest-bearing account”, the PTI quoted the official as saying.
Indian Oil’s finance director A.K.Sharma told reporters last week the company could pay a part of its oil import dues to Iran as early as this month.
“The re-entry of Iran in the market will help Indian refiners boost their margins and the removal of sanctions would allow India to freely buy crude oil from Iran, resulting in lower shipping costs from reduced transportation times”, the chamber said in a statement.
Iran was until 2006 India’s second-largest supplier of crude oil, but dropped to number seven by the end of 2013-14.
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Oil services companies that had been active in building refineries in Iran prior to the sanctions, including Australia’s WorleyParsons, France’s Technip and Axens, South Korea’s Daelim and China’s Sinopec Engineering were all interested in resuming business in the country, the sources said.
