Ruling out any significant impact on India’s crude oil supply, the government has said it will import oil from Iran to offset any supply disruptions arising from imminent strikes by the US on Syria.
With reports of imminent strikes on Syria, prices of oil in the global markets have hit new highs, a move that is putting further pressure on India’s economy, which is already battling a high current account deficit (CAD).CAD is the difference between dollar inflows and outflows and since India imports 80% of its oil requirements, crude is a major determining factor for CAD.
In case of imports from Iran, the payment is done in the Indian rupee.
“We have provisions to import oil from Iran as currently we are importing much less than we actually can do from there,” Arvind Mayaram, economic affairs secretary told HT. “So even if there are problems in Syria, we are not going to be impacted in any significant way.”
India could import up to 11 million tonnes oil from Iran in 2013-14.
The government has already said that there would be no major impact on the CAD situation due to the emerging political tension in Syria and India was ready to fully finance it.
Until 2010-11, Iran was India’s second-largest supplier after Saudi Arabia but has since slipped to the sixth place.
Prime Minister Manmohan Singh has sought a $25-billion cut in the oil import bill to narrow CAD.