Thaindian News

Kolkata, Sep 22 (IANS) India is likely to put in place a permanent mechanism in a month’s time to resolve the oil payment dispute with Iran, an official said Thursday.

“I am expecting a solution to be in place in a month,” Commerce Secretary Rahul Khullar told reporters on the sidelines of the Annual General Meeting (AGM) of the Indian Tea Association here.

India had not made payments for oil shipments from Iran for the past few months and around $7 billion are due to Iranian oil companies.

Khullar said the finance ministry was closing in on a permanent solution to the payment issues with regard to both Indian imports and exports.

Trade has been affected due to the payment settlement crisis which started from December 2010.

India and Iran recently agreed to settle their oil payment row in two phases. In the first part, India last month paid arrears and agreed to pay remaining bills gradually.

Recently, some payment was made through Turkey.

On whether India would route its payments through Turkey or introduce rupee trade, Khullar said all such options were being looked into.

Because of the payment settlement crisis, tea prices were subdued by Rs.10 per kg this year compared to the previous year.

India exports tea, refractories and a host of other items to Iran.

Indian Tea Association secretary general Manojit Dasgupta said: “Between January to August, tea export to Iran was down by 4 million kg, compared to the previous year.”

Iran is the second biggest supplier of crude oil to India after Saudi Arabia. Nearly 12 percent of India’s oil demand is met by Iranian supply.

India imports nearly 400,000 barrels of oil from Iran each day.