Iran agrees to part payment for crude imports in Indian rupee.

NEW DELHI: Iran has agreed to receive part payment for crude oil exports in rupees through Indian banks, the government said today.

On a query if Iran has agreed to part payment in Indian currency for crude oil sale to India, Minister of State for Commerce and Industry Jyotiraditya Scindia said, "Yes Madam."

In the written reply, Scindia informed the Lok Sabha that confidential commercial arrangements have been worked out for payment in Indian currency.

On a query whether such payment in Indian currency may get extended for imports other than crude oil, he replied, "Yes Madam, confidential commercial arrangements that have been worked out are due to large trade deficit of India with Iran."

The Reserve Bank of India in December 2010 withdrew the Asian Clearing Union (ACU) mechanism under which payments were made to Iran.

India imports about 12 million barrels of crude oil every month from Iran, which is the nation's second-largest supplier after Saudi Arabia.

After the scrapping of the ACU mechanism, Iran had continued to supply oil on credit despite the outstanding amount crossing $ 3 billion.

Replying to another query, Scindia said there has been an increase in the import of power equipment from other countries especially China.

During April-December 2011, total imports of power equipment were Rs 22,609.15 crore whereas shipments from China were worth Rs 15,230.73 crore, the minister added.

"In order to protect the interest of the domestic stakeholders, a Committee was set up in Planning Commission which recommended levying of customs duty on import of equipment for mega and ultra mega power projects," he added.

However, there was no such announcement in the Budget proposal.

Source : economictimes.indiatimes.com