India will make 45% of the payment for oil imported from Iran in rupees through five Indian banks, Iran ambassador to New Delhi Seyed Mehdi Nabizadeh said on Tuesday.
The money can be used for paying for imports from India or Indian firms investing in projects in Iran, it is learnt.
“A suitable mechanism has been found out. All the payment which was not being paid by India last year has been paid... This was the proposal by India and we accepted it,” said Nabizadeh, adding both sides were "satisfied" with 45% payment plan in rupees.
He said the two countries will find a mechanism for payment of the remaining 55%. Since the rupee is not fully convertible, the payment is expected to face restrictions.
Iran accounts for 13% of India’s its oil needs, estimated about $11 billion annually. Asked whether Iran will offer any discount on crude price to Indian, the envoy said “Oil prices are an international issue. The price of oil is based on a formula.”
Iran is also looking at boosting its imports from India to utilise a part of the rupee amount. India is set to send a delegation to Iran this month to explore ways to boost exports. The ambassador also said Indian companies could look at investing in projects in Iran such as developing gas-to-liquid plants, mining, building roads and railways infrastructure and developing oil and gas fields.
He also said that for India, there was potential to boost exports of iron, steel, machinery, equipment, agricultural products like rice and minerals.