India restores oil payment to Iran

Having restored payments to Iran for oil imports two days ago,India is now urgently looking for alternative options to process payment to Iran for long-term basis. The Reserve Bank of India (RBI),which had stopped Indian companies from using the Asian Clearing Union (ACU) to process current account transactions for oil and gas imports following American pressure,was asked to “restore” status quo in a high-level meeting early this week. Contrary to reports,sources said India hasn’t closed down the ACU route.

Following the decision,the RBI executed what is called the “status quo ante”— a term used for restoring status quo. It meant payments will be made to Iranian firms for the oil which India buys,and they will not be stopped.

This decision was taken keeping in view of India’s regular oil imports from Iran,which is one of the biggest sources for petroleum products. Now the government is actively exploring alternative methods to process payments. The most favoured route could be the commercial bank channels,sources said.

To discuss the issue,an Iranian delegation is coming here on Friday. Following this meeting,a team of Indian bankers and insurance experts will go to Tehran to exchange notes on how to find a solution to this issue.