RBI Prevents Indian Companies from Transacting with Iran through the Asian Clearing Union
- Author Dezan Shira
- Published February 7, 2011
- Word count 435
India’s central bank on Monday asked Indian importers to settle debts owed to Iranian firms in currencies other than the dollar and euro, presenting somewhat of a mixed picture for the future of Indo-Iranian relations.
Since 1974, the two countries have conducted a majority of their trade through a clearing house called the Asian Clearing Union. The organization’s purpose once involved removing the various costs of doing international business by having each nation’s central bank pay for debts through widely used currencies on behalf of its companies.
This past year, Iran’s use of the clearing house increased by more than 50 percent compared to last year after describing the clearing house to Indian and Iranian companies in 2009 as a way to "sidestep the U.S. banking system altogether."
The U.S. Treasury has regularly raised the issue with India for more than a year, official sources told the Wall Street Journal. Pressure was stepped up following President Barack Obama’s India trip in early November, where he publicly offered his support for India’s bid for a permanent seat on the U.N. Security Council.
And yet, the impact of India’s latest moves on its relationship with Iran and the rouge nation’s controversial nuclear program remains unclear.
Despite sanctions undertaken by the United States, the European Union, and other international actors, Iran has given no sign that it is willing to dismantle its nuclear program. Some believe Tehran will continue to find ways around the sanctions.
Major Indian firms, including Oil & Natural Gas Corporation have been exploring how to develop energy resources with Iranian partners. Reliance Industries was a major supplier of gasoline to Iran, which lacks adequate refining capabilities, before pulling back last year because of international restrictions.
India imports US$11 billion of crude oil per year from Iran—roughly 14 percent of its entire crude oil demand, according to statistics provided by the government. Iran is India’s second largest supplier of crude oil, closely following Saudi Arabia.
India and Iran have also worked together in the past to achieve defense-related goals, including checking the Taliban in Afghanistan and Pakistan. The two have also announced infrastructure projects aimed at connecting Central and South Asian markets.
The Reserve Bank of India did not explicitly mention geopolitical concerns roused by the United States and other nations during its announcement of the latest change; it instead cited "the difficulties being experienced by importers/exporters" in transferring funds to Iran.
While transactions are effectively prevented in dollars and euros, firms may still trade in rupees and rial, respectively the currencies of India and Iran.
This article was written for India Briefing, an English language news site regarding business in India. It was established over 10 years ago by Chris Devonshire-Ellis.
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- “Mira Sorvino: From Oscar Glory to Hollywood Silence.”
- Ireland Sino Institute Launches 2025 China Internship Program
- “Beyond the Spotlight: The Rise and Fall of Dorothy Dandridge.”
- “Through the Mist of Venice: Revisiting Don’t Look Now and Its Haunting Grip on Grief.”
- The Art of Coaching: Cultivating Growth and Inspiration
- Creating a Holistic Backyard Retreat: Old World Elegance Meets Nature
- Understanding T1 and T2 Transit Documents in EU: Your Complete Guide
- Cryptonews.money: Your Ultimate Guide to Understanding Cryptocurrency
- 15 Basketball Dribbling Games and Passing Drills for Better Ball Handling
- Transdermal Progesterone Cream: Benefits for Hot Flashes and Menopause Symptoms
- Tepezcohuite: The Ancient Skin Health Secret You Need to Know
- Quiet Cars and Busy Calendars: The Overlooked Role of Chauffeurs in Post-July Corporate Travel
- 1031 Exchange
- Breaking Karmic Cycles, Creating a Shiva Altar with Deity Carvings and Sculptures from Mogul Interior
- The Art of Whimsical Carved Wall Art & Eclectic Décor
- “Hellfire and Heresy: Ken Russell’s The Devils and the Fury of Sacred Cinema.”
- Transform Your Bedroom into a Productive Haven: Ultimate Guide to Bedroom Inspirations with Desk
- “Heatwave: When Crime, Character, and Two Legends Collided in Michael Mann’s L.A.”
- Steam Vs. Scrub: The Best Chemical-Free Tools For Cleaning Tile Edges And Grout
- A Smart Solution for Clean Environments: Hygienic PVC Wall Cladding
- Choosing the Right Stainless Steel Panel Adhesive for Durable Wall Cladding Installations
- How to Choose the Right PVC Panel Adhesive for a Professional Finish
- Precision Finishing with Steel Cladding Profiles and Trims
- The Finishing Touch: PVC Cladding Trim & Profiles for a Seamless Installation
- Lightweight Strength: Why Aluminum Cladding Sheets Are a Smart Choice for Modern Projects
- Durable and Hygienic: Why Stainless Steel Wall Cladding is the Industry Standard
- Transform Your Interiors with PVC Ceiling Panels and Planks
- Enhance Hygiene and Style with BIOMAX Coloured Hygienic Wall Cladding
- Add Vibrancy and Protection with PVC Colour Wall Cladding
- Superior Protection with Antimicrobial PVC Wall Sheets