India reaches on oil deal with Iran

India reaches on oil deal with IranThe government of India has been able to budge immense pressure from its western allies and has reached an agreement with Iran over how to make payments for the oil imports from the Islamic Republic.

Under the new agreement, India will pay 45 of the import bill into bank accounts opened by Iran in India and the remaining will be spent by India on Iran’s infrastructure. The Indian oil companies are increasing finding it difficult to pay for oil imports from Iran due to the several rounds of sections against Iran from western countries. Turkish firms, which used to act as intermediaries between India and Iran for oil trade had expressed in early January that they will stop acting as a bridge between Indian and Iranian firms for transfer of payments due to sections against Iran.

The governments in Europe and the US are urging Asian countries to reduce oil imports from Iran so as to make their sanctions more effective in order to force Tehran to come clean on its nuclear programme. Iran is suspected of covertly developing nuclear weapons, a charge it denies and maintains that it has the right to harness civilian nuclear energy for generating power.

India’s union finance minister Pranab Mukherjee recently said that it wont be possible for the country to reduce oil imports from the country, which accounts for 12 per cent of its supply.