After Prime Minister Narendra Modi’s successful visit to Iran, the two countries have intensified their cooperation in the energy sector. “India’s oil refiners have paid about $750 million in the past two weeks and aim to clear in the next three months the entire $6.6 billion owed to Iran for crude purchased during the sanction years,” an unnamed oil ministry official said.
The two countries have sought to restore oil trade to the levels prior to the sanctions imposed on Iran. With most of the sanctions lifted on Iran, Indian refiners have begun paying Iran for the earlier purchases. India couldn’t make payments earlier to Iran due to the unavailability of the banking channel as sanctions had made it difficult to trade with Iran.
Indian refiners are now allowed to use euros to make payments with the easing of sanctions. India is one of the leading buyers of crude oil from Iran. India imported about 12 million metric tonne of crude oil in 2015-16. India is expected to increase its imports this financial year as sanctions have been lifted.
Iran is one of India’s biggest oil suppliers after Saudi Arabia and Nigeria. Post sanctions, Iran has sought a share in the global oil market. Iran wants India to raise imports of crude oil from Iran to the pre-sanction days level. The two countries have sought to bolster cooperation in the energy sector and India has also offered to invest up to $20 billion in Iran. Some of the sectors that India has targeted in Iran include new petrochemicals, fertiliser and liquefied natural gas (LNG) facilities.
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