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"State-run Hindustan Petroleum (HPCL) has made its first payment for Iranian oil in rupees to partially settle its bill for a cargo imported in May, company officials said on Friday, a move that will help New Delhi fix its trade imbalance with Tehran . . . India is Iran's second-largest oil buyer, but has struggled to find ways to pay for the oil as Western sanctions curb international financial payments destined for Tehran. The two countries agreed in January to settle 45 percent of the oil trade in rupees. The balance of HPCL's payment, made on Friday, was through Turkey's Halkbank and India's UCO Bank. 'This is the first payment we have made since the gate was opened...we have paid 45 percent in rupees and 55 percent through Halkbank,' B. Mukherjee, head of finance at HPCL, told Reuters. Since July 2011, refiners in India have been using Halkbank to pay their annual oil import bill of more than $10 billion, after a previous payment channel was blocked in December 2010 . . . HPCL has paid 2.75 billion Indian rupees ($49.25 million) to Iran through UCO Bank and $60 million through Halkbank, a company source privy to the matter said." (Reuters, "India HPCL begins rupee payment for Iran oil," 3/8/12)
"India, after much delay and uncertainty, is ready to move ahead with a rupee payment mechanism designed to bypass U.S sanctions on trade with Tehran, a senior industry executive said Wednesday.
Under the move, Indian oil companies that import crude oil from Iran will deposit the payments into rupee accounts held in UCO Bank, and these funds will be used by Iran to pay for agricultural products and medicines from India...Payments can be made now that the exemption has been signed into law, Mr. Ahmed said. He said a total of about $4.5 billion could eventually flow into the rupee account, although he didn't provide a time frame for this…Iran accounts for a significant share of India's crude imports, with the later arguing it needs Iranian oil to meet its growing energy demand.
Under U.S. pressure, New Delhi has cut back on purchases from Iran to about 9% of its total oil imports from 12% last year, pushing Iran to the fourth position as a supplier from the second position it held earlier.
Mr. Ahmed said Indian goods worth $500 million to $600 million would be shipped to Iran two to three months after the rupee payment mechanism is activated. 'Iran is a very promising market. The demand [from Iran] and supply from India is ready, so we had to make it happen,' he said.
Of this, 65% to 70% will be agricultural products and the rest pharmaceuticals, he said." (Wall Street Journal, "India Clears Iran Payments Move," 6/20/2012)
"Indian refiners are waiting to make payments into the account at UCO Bank until New Delhi implements a planned exemption for them from a hefty local tax, which was announced in March and can take up to 60 days to be put into effect . . . Parsian's Tehrani said Iran had offered to deposit about 10 million euros ($12.5 million) in the bank's account with UCO bank to settle the dues of Indian exporters. 'Unfortunately they (New Delhi) did not accept our request,' he said. 'We have LCs worth 20 million rupees under negotiation with UCO Bank, but it's been over a month and we have not got a payment,' said Pankaj Bansal, a partner at engineering goods maker TMA International." (Reuters, "Iranian bank halts guarantees for India imports," 6/12/12)
"Iran's Parsian Bank has opened a credit window in India's UCO Bank Ltd. to facilitate payments for Indian exporters in rupees, Federation of Indian Export Organizations said Friday. 'The payment problem with Iran has been resolved (for exports from India) with the rupee payment mechanism through UCO Bank becoming operational,' M. Rafeeque Ahmed, FIEO's president, said in a statement." (Wall Street Journal, "UCO Bank to Facilitate Export Payments From Iran," 3/2/2012)