New Delhi: India and seven other countries will get benefited from US temporary waiver to buy Iranian oil. India being a major importer of Iranian oil, second after China, has started working on such arrangements which can benefit India in trade with Iran.
Some major arrangements have been made for the payment which include rupee being the trading currency between two countries. India will pay Iran only in rupees and Iran will use Indian rupee on imports from India.
Here are some highlights of the story:
- India got relief for 180 days from US sanction on Iranian Oil import.
- India is working on the arrangements of payment for oil imports from Iran in Indian currency.
- India will made whole payments through Indian Bank (UCO) in rupees and Iran will use that money on things to be imported from India.
- America wants to establish such arrangements where Iran does not get US dollars in return for its export.
- India is likely to restore to the old system of payment where the payment will be done in an account with UCO Bank. As UCO Bank does not have international recognition, hence there is no such threat to restrictions.
- Earlier, the payment to Iran was done in two parts. Where 45 percent of the payment was made from the UCO Bank account and 55 percent was made in the Euro. But in this arrangement Iran will accept all payments in Indian rupee.
Even if the Iran’s bank gets banned the payment will not be hampered
As Iran will use this money for the payments of imports from India, a danger of Iranian banks getting banned from SWIFT payment system is always there. If such situation ever arises then the transaction between the two countries will not suffer.
It is to be mentioned that the second step of US sanctions would target Iran’s energy sector, shipping, shipbuilding and financial sector.
A senior US official, Brian Hook, confirmed in an interview, the countries that continue to import oil from Iran will have to open an escrow account. According to him, the Escrow account will not get Iran it’s hard currency and Iran wont get any revenue from Oil export. He said that whenever Iran will export oil to any country the payment will go to that country’s Escrow account and Iran will have to spend that money.
America’s finer eyes on the money that Iran receives
Hook further said that the United States would encourage such countries to spend that money on humanitarian cause and good of its people. He also warned that America will closely monitor such accounts.
It is also said that America will not give relief in the sanction in future. America is also trying hard to increase economic pressure on Iran while carefully monitoring oil prices.