The Reserve Bank of India (RBI) clampdown on the main conduit used for settling trade transactions with Iran has affected trade with the Persian Gulf nation, Commerce Secretary Rahul Khullar has said.
RBI had last month disbanded a mechanism of using central banks in the region to settle payments for imports from and exports to Iran and in absence of an alternative system, the $13.4-billion trade between the two nations is affected.
“Of course, there is a hindrance (in exports and imports). There is no (payment) settlement system in place... it is hurting trade. Exporters on both sides are hurt,” Khullar said.
The bilateral trade between the countries stood at $13.39 billion in 2009-10. Iran is India’s second-largest crude oil supplier after Saudi Arabia, exporting oil worth $1 billion every month — about 14 per cent of India’s total crude oil import bill.
Khullar said exporters of both the countries were not able to ship their goods as there was no payment mechanism.
“They (Iranian traders) don’t want to send (goods) as they don’t know how they will receive payments. You (India) don’t want to send because you don’t know how you are going to receive payments...,” he said.
