Having restored the payments to Iran for oil imports two days ago,India is now urgently looking for alternative options to process payment to Iran for long-term basis. The Reserve Bank of India,which had stopped Indian companies from using the Asian Clearing Union (ACU) to process current account transactions for oil and gas imports following US pressure,was asked to restore status quo in a high-level meeting early this week. Following the decision,RBI executed what is called the status quo ante a term used for restoring the status quo. In this case,it meant that payments will be made to Iranian firms for the oil which India buys,and they will not be stopped. In short,RBIs move to stop payments was reversed. This decision was taken keeping in view of Indias regular oil imports from Iran,which is one of the biggest sources for petroleum products. However,having done that the government is now actively exploring alternative methods to process payments. And the most favoured route could be the commercial bank channels,sources said. This means that the payments will be done through some European banks,and there are talks to zero in on one of the credible central banks in Europe. They will be told that the payments are for oil imports,so that there is violation of sanctions. Currently,Oil from Iran has four big importers and they are China,Japan,South Korea and India. Of these four,China and Japan already follow the European bank channel route. South Korea follows a currency-to-currency route,which is not financially viable for India because of its trade imbalance with Iran. To discuss these issues and resolve this imbroglio,an Iranian delegation is coming to India for talks on Friday. Following this meeting,a team of Indian bankers and insurance experts will go to Tehran to exchange notes on how to find a solution to this issue.
