The significant and historical visit of the Indian Prime Minister Narendra Modi to Iran, slated for May 22, provides a golden opportunity for both countries to develop ties and focus on ways of settling their financial disputes.
New Delhi has arrears of $2bn in oil payments with Iran. It blamed the banking sanctions for causing the delay, but now Iran demands that India pay the overdue amount since the banking sanctions have been lifted, according to IRNA.
During his two-day stay in Tehran, the Indian premier is to meet with the Supreme Leader, the President and Foreign Minister, as well as a number of other senior officials.
Indian officials have announced that the Prime Minister’s imminent visit is aimed at boosting ties and signing memoranda of understanding regarding energy. After Iran, Modi is scheduled to travel to Qatar.
Iran and India are expected to ink a memorandum of understanding on fighting terrorism and defence cooperation, which will contribute to peace and stability in the region. Also on the agenda are the North-South Corridor and investment in the railway network.
A memorandum of understanding on developing the Farzad B Gas Field will be finalized during the visit. The MoU on the Farzad B gas field was drafted by India’s Minister for Petroleum and Natural Gas Dharmendra Pradhan, who led a delegation of major private sector representatives from the oil, gas, and energy fields to Tehran on April 16.
New Delhi is ready to clear some $6.5 billion of debt for Iranian oil in near future, provided there is clarity on the channel of payment, Indian media reported Sunday, citing government sources.
“We are working on clearing the dues to Iran and are hopeful that the issue will be resolved soon,” the NDTV broadcaster quoted its sources as saying.
According to the broadcaster, a series of bilateral negotiations at various levels have been held both in Tehran and New Delhi. The sources reportedly told the media that both sides were confident of being able to resolve the issue soon.
However, according to the media, despite the Western sanctions on Iran now being lifted, there are still some issues with banking channels, which create obstacles for regular transactions.
Following the lifting of sanctions, Iran terminated the discounts for India, which included the payments being carried out in rupees, and free delivery of oil, and has since been insisting on payments for the crude it exports to Indian refineries to be carried out in euros.