The issue between India and Iran over payments to Indian exporters for shipments to the West Asian country has been resolved, Federation of Indian Export Organisations (FIEO) said on Friday.
“The payment problem with Iran has been resolved with operationalisation of rupee payment mechanism through UCO Bank. The payments which have been stuck in the past will be cleared expeditiously,” FIEO President Rafeeque Ahmed said in a statement.
The sanctions on Iran by the US after the country announced its nuclear programme has disrupted Iran’s trade with many other countries of the world, including India. Ahmed exuded confidence that the business delegation to Iran from March 10 to 14 would now be able to negotiate new contracts diversifying and expanding exports.
Ahmed said the Directorate General of Foreign Trade has also agreed to grant export benefits on such payments, though paid in rupee, as applicable to payment in free foreign exchange. A notification in this regard will be issued soon. “Such positive action by the government will encourage exporters to aggressively export to Iran and optimise utilisation of rupee balance in oil import pool.”
FIEO has been asked to bring any case where exporter faces payment problems to the notice of the Department of Financial Services in the ministry of finance.
In December 2010, the Reserve Bank of India had scrapped a long-standing mechanism under which payments were made to Iran.
Iran, which imports 21 million tonnes of oil to India, is the second largest supplier of crude oil to India after Saudi Arabia. India is also its second largest oil customer after China.
