India, Iran settle payment mechanism for bilateral trade

New Delhi: In a significant development India and Iran have agreed to set up a payment mechanism which would facilitate bilateral trade. The development would indicate a breakthrough in resolving the India-Iran payment crisis for import of oil as well as exports of both nations.

According to the finance ministry sources, both sides have agreed on a mechanism to be put in place for the purpose of clearing payments of Indian exporters and, though the statement did not specifically mention it, such a mechanism would also include payments made by India for buying Iranian crude oil.

The issue of payments for imported Iranian oil had been hanging in fire for the last nine months as both sides tried hard to come up with a viable payment mechanism in the face of determined opposition from Western powers.

Iran is facing economic sanctions imposed by Western powers through the aegis of the United Nations.

The payment arrangement for bilateral trade has emerged after a meeting between department of economic affairs (DEA) secretary, R Gopalan, and the vice-governor of the Central Bank of Iran, Seyed Kamal Seyed Ali.

The ministry of finance statement said both sides agreed to continue their engagement in the matter.