India pays second installment of $550 m to Iran in oil dues

Written by Press Trust of India | New Delhi | Updated: Jul 10 2014, 02:36am hrs
India on Tuesday paid the second installment of $550 million to Iran to clear over one-fourth of its dues for oil imports from the Persian Gulf nation.

Indian refiners had paid the first installment of $550 million on June 26 and second one was paid on Tuesday. A third tranche of an equal amount will be paid by July 20, government and industry sources said on Tuesday.

Since February 2013, when the US blocked payment channels to Iran for its nuclear programme, India has been paying 45% of its Iran oil bill in rupees through a UCO Bank branch in Kolkata. For the remainder, it has been waiting for a way to make the payment.

As much as $4 billion has been accumulated in dues. A payment mechanism is now in place under which $1.65 billion in three installments of $550 million each will be transferred to Iran via the UAE central bank, they said, adding the last installment will be paid before July 20.

Rupee payments equivalent to $550 million were deposited by Indian refiners in the Uco Bank account, which will now be transferred to the RBI for onward credit to the central bank of the UAE, which will make payments in dirhams to Iran.

Iran is seeking interest on the dues. However, the Indian government and RBI have rejected the request, saying they had always been ready to make timely payments but the problem of mode and channel were due to Iran. Under an interim deal with the US and five other powers in November, Iran won access to $4.2 billion in past oil revenue from a number of countries, including India.