India Says Committed to Settling Oil Dues in Euro

India Says Committed to Settling Oil Dues in EuroIndia Says Committed to Settling Oil Dues in Euro

India's Minister of Petroleum and Natural Gas Dharmendra Pradhan said New Delhi is determined to settle its pending oil debt amounting to $6 billion to Iran.

In a news conference in Tehran on Saturday, Pradhan told Financial Tribune the first banking channel to settle the debt was established between the two countries "only days ago", stressing that it will take some time to see the transfer happen.

"Our central bank will discuss terms with the Central Bank of Iran. There will be a mutual mechanism [for repayment]. We have agreed on a lot of things that will be known to you very soon," he said. Speaking to reporters after meeting Pradhan on Saturday, Iran's Oil Minister Bijan Namdar Zanganeh expressed confidence that India will "immediately" clear its accumulated debt to Iran, noting that a timeframe for the repayment has yet to be worked out.

He said the Indian side had confirmed that financial channels are now open and hoped the opening of two more channels in the near future will facilitate the payment. But he did not clarify whether the payment will be a single payment or in tranches.

Zanganeh said Iran will receive its outstanding oil dues in euro from everyone, including the Indians, ruling out payments in rupees. He also laid to rest speculations that India could offset part of its debt by selling goods.

Pradhan is on a three-day visit to Iran to bolster economic ties between the two countries that have increasingly demonstrated converging interests and a huge potential for cooperation in the post-sanctions period.

India also plans to make a massive $20 billion investment in the southern port city of Chabahar and is engaged in negotiations to secure the development rights for Iran's Farzad-B Gas Field in the Persian Gulf.

On a different note, Zanganeh took a jab at Saudi Arabia's efforts to dent Iran's oil exports.

Reports circulated last week that Saudi Arabia and its Arab ally Bahrain have banned the entry of Iranian crude tankers in their ports, an effort to stymie the shipment of Iran's crude.

"Saudi Arabia does not have the power to sanction Iranian vessels," Zanganeh told reporters.