"The payment problem with Iran has been resolved with operationalisation of rupee payment mechanism through UCO Bank. The payments which have been stuck in the past will be cleared expeditiously," Federation of Indian Export Organisations (Fieo) President Rafeeque Ahmed said in a statement here. He said "such positive action" by the government will encourage exporters to aggressively export to Iran and optimise utilisation of Rupee balance in oil import pool.
The Department of Financial Services, Ahmed said, has asked the Fieo to bring cases where an exporter is facing payment problem with regard to export to Iran before the government. Following resolution of the payment issue, he said the Indian business delegation, which is going to Iran on March 10-14, will be able to negotiate new contracts with their Iranian counterparts.
The Directorate General of Foreign Trade (DGFT) has also agreed to grant all export benefits to exports for which the payment is received in Indian rupee, he said, adding the notifications would be issued soon.
The problem with Iran began after the Reserve Bank of India (RBI) in December 2010 withdrew the Asian Clearing Union (ACU) mechanism under which payments were made to Iran.
India imports 12 million barrels of crude oil every month from Iran, which is the nation`s second-largest supplier after Saudi Arabia. After the scrapping of the ACU mechanism, Iran, which makes up for over 12 per cent of India`s oil needs, had continued to supply oil on credit despite the outstanding amount crossing USD 3 billion.