Azernews.Az

Iran has agreed to take payments for oil it sells to India entirely in rupees after the US and western sanctions blocked all other payment routes, The Time of India reported on July 14.

India has been paying for 45 percent of its Iranian oil imports in rupees, which has limited international acceptability, and was settling the remainder in euros through Turkey's Halkbank (HALKB.IS), but this was halted in February under pressure from tighter western sanctions.

The U.S. and European Union slapped sanctions on Iran to block oil revenues over its disputed nuclear programme, which they suspect aims to build weapons. Iran denies this claim.

Since April 1, Indian refiners have held on to 55 percent of payments as Iran has been exploring avenues, including settling in roubles through Russia, the sources said. The non-payment was seen as a hidden incentive or a temporary relief on top of attractive credit terms offered by Iran to Indian clients.

Iran has now agreed to take all of their payment in Indian rupees, sources reported.

As the euro route was blocked and Iran did not indicate an alternate mode of taking payment for 55 per cent of the oil it sold to Indian refiners, over 1.5 billion dollars in dues got accumulated.

Tehran has now agreed to take this overdue amount in rupees, they said, adding that the entire overdue amount will be cleared within a month.

India imported 262,800 barrels per day (bpd) from Iran in 2012/13, a reduction of 27.4 percent from the previous year, according to preliminary government data