Commercial : LESSON 1

Oil imports: India-Iran work out rupee trade mechanism

MANGALORE: Indian and Iranian governments have worked out Rupee trade mechanism for payment of India's total crude imports from the latter in Rupees rather than convertible currency - the US Dollar normally used for such trade globally. The new mechanism is  to be operational . This arrangement comes in wake of American and European anti-nuclear sanctions that are increasingly disrupting Iran's economy. 

Anup K Pujari , Director General of Foreign Trade interacting with reporters on the sidelines of Karnataka: Export Vision 2020, exporters' convention organised by Federation of Indian Export Organisations (Southern region) that a decision to denominate our trade in rupee terms was taken at a bilateral meeting of two countries as trade cannot be done using international currency. "It is not barter, but it is almost like barter," he said. Explaining the mechanism worked out, Anup Pujari said whatever oil India imports ($ 11 BILLION ) from Iran and for that oil whatever money India is supposed to pay, part of that amount will be retained in a bank in India. Thereafter, any Indian who exports ($3 BILLION) to Iran need not have to bother about some US bank. Once (export) documents are negotiated, the designated Indian Bank, where the money will be kept, will pay the exporter the equivalent amount in Indian currency.