India so far gets oil from its third largest supplier in ships owned by domestic firms. Ships and oil are being insured by European reinsurers.
But domestic shippers may not be able to transport the oil when European Union sanctions against Iran come into effect in July, as they will not get insurance cover.
As a way out, Oil Ministry has proposed that Iran ship the crude oil in their own ships, practically absolving the importer of the liability to get insurance cover for the carrier and the oil.
"We have asked Shipping Ministry to allow Iranian ships to transport oil," Oil Secretary G C Chaturvedi told reporters.
Also, the ministry is seeking intervention of the finance ministry to get state-owned General Insurance Corp (GIC) to provide insurance cover to domestic ships carrying oil from Iran.
"We are currently receiving supplies from Iran," he said adding American insurance companies too can be tapped as Washington this month exempted India from Iran-related financial sanctions in exchange for significant cuts in Indian purchases of Iranian oil.
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Sovereign guarantee to cover for loss of ship or loss of oil cargo, may be extended to shippers as the last resort in case all options fail.
India has relegated Iran as its third largest supplier by bringing down imports from 18.5 million tons in 2010-11 to 17.44 million tons in 2011-12 and to 15.5 million tons this fiscal. MORE