India to clear oil debts to Iran via Turkey

Business Materials 14 May 2016 16:52

Baku, Azerbaijan, May 14

By Fatih Karimov - Trend:

India will settle its $6.4 billion oil debts to Iran via Turkey's Halkbank, Saurabh Kumar, India's ambassador to Tehran said.

India is preparing the grounds to pay its debts for the past oil purchases from the Islamic Republic, Kumar said, Fars news agency reported May 14.

He further said that the oil debt will be paid back in euro.

New Delhi had so far been unable to transfer the amount to Tehran as a result of the international sanctions. The sanctions had created a series of draconian economic restrictions on Iran that included a ban on the country's access to the global banking system.

Nevertheless, they were lifted in January after a deal that Iran had sealed with the P5+1 group of countries - the five permanent members of the Security Council plus Germany - was put into effect.

India's refiners have been holding 55 percent of the country's oil payments to Iran after a route to make payments through Turkey's Halkbank was stopped in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions.

Also because of the previous sanctions, Indian refiners have been depositing 45 percent of their oil payments to Iran in rupees with India's UCO Bank.

Kumar said that it was expected that the debts will be settled in a short term following last year nuclear deal, but it is a time-consuming procedure.

The US Secretary of State John Kerry has showed green light for the activities of European banks in Iran, however the EU banks still fear from resuming business with Tehran, he said.