Indian officials to visit Iran in mid-January to settle oil payments issue

Indian officials are expected to visit Iran in mid-January to negotiate a long-term settlement at the central bank level for oil payments, reports quoting government sources said today.

India and Iran failed to strike an agreement on oil imports from Iran worth an annual $12 billion on transparency terms set buy the US.

The Reserve Bank of India (RBI) last week said it was no longer possible to make payments to Iran through the established mechanism, leading to fears of stoppage of crude imports from Iran. The move has been welcomed by the US.

Meanwhile, an agency report quoting a government official in India said Iran has offered a stop-gap plan for oil supplies to India for January. However, a lasting solution to the problem over the modalities of payments for future supplies may take weeks to settle, say analysts.

Iran is India's second biggest crude oil supplier after Saudi Arabia, accounting for about 13 per cent of its total crude oil imports.

The Indian move came soon after US President Barack Obama's visit to New Delhi. The move earned praise from Washington as it would reduce the misuse of funds by Iran to support its nuclear activity. The West suspects Iran of pursuing a nuclear policy with military aims.