Economy, Business And Markets

Turkey Bank to Handle India’s Oil Payment

Turkey Bank to Handle  India’s Oil Payment  Turkey Bank to Handle  India’s Oil Payment

India will settle its $6.5 billion oil debts to Iran through Turkey’s Halkbank, said India’s ambassador in Tehran, Saurabh Kumar on Saturday.  

Speaking on the sidelines of the Iran-India Economic Conference at the  Tehran Chamber of Commerce, Industries and Mining, Kumar said "Officials from the two countries have reached an arrangement to  process the pending oil payments in euros,” TCCIM’s website quoted him as saying.

Indian Prime Minister Narendra Modi will travel to Tehran next week, he said.

Indian refiners have been holding 55% of the oil payments to Iran after the channel to make payments through Turkey's Halkbank was stopped in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions.

Buyers of Iranian oil were prevented from using global banking channels to clear their transactions after sanctions were imposed in 2011 over the nuclear program dispute. With the end of the sanctions in January following a deal with the six world powers, Tehran is gaining access to the funds blocked overseas.

Normalizing Banking Ties

Addressing European banks’ hesitation in resuming relations with Iran, Kumar said the US Treasury is planning to hold a meeting on Iran's overseas banking relations soon which "would be a turning point for Iran’s relations with foreign banks.”

“All Parties are determined to solve Iran’s banking problems,” he said calling on Indian businesses to initiate trade with Tehran. “Banking relations will be normalized gradually.”

Referring to Indian companies' plans for the development of Chabahar Port, the envoy said “investment contracts have been finalized and Indian companies are prepared to start working in Chabahar.”

On his much-anticipated trip, Modi is expected to seal much-awaited commercial contracts. The deals pertain to India’s participation in Chabahar Port development, Indo-Iran-Afghan pact for the use of the strategic port and a possible deal on India’s participation in Farzad-B gas field where Indian multinational oil and gas company ONGC plans to invest $3 billion.  

Masoud Khansari, head of TCCIM, said that the two countries have the potential for expanding relations to higher levels and “more than merely trading goods.” He called for joint investments in transportation, oil/gas and pharmaceutical industries.

Pointing to India’s investment in the Chabahar Port, Khansari complained that the development process is too slow and should be accelerated.

A delegation of 16 Indian companies traveled to Tehran Saturday to discuss commercial ties. The country is the second largest buyer of Iran’s oil after China and was the fourth biggest importer of Iranian non-oil goods in the last Iranian year that ended in March.  Iran exported $10.3 billion of non-oil goods to India while India’s non-oil exports to Iran stood at $4.31 billion. Basmati rice comprises a significant share of India’s exports to Iran, amounting to $2 billion in 2013-14.