Com Min for resumption of ACU payment mechanism with Iran
The commerce ministry has pitched for resumption of the Asian Clearing Union (ACU) mechanism of payment with Iran in order to promote bilateral trade.
On December 23, 2010, Reserve Bank of India had stopped facilitating payments for Iranian crude imports through this mechanism.
Under ACU, imports by nine nations are settled every two months with each member paying for imports after netting out its exports among the union.
The central banks of nine countries in ACU are from India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
The commerce ministry has raised re-activation of this system during a meeting earlier this month with the Department of Financial Services and the RBI, an official said.
Departments of commerce and financial services have decided to set up a joint task force to resolve all banks related problems of traders, the official added.
Following the US sanctions on Iran over its disputed nuclear programme, the payment problem with Iran began as RBI in December 2010 withdrew the ACU mechanism.
The commerce ministry has also sought establishment of banking ties in Iran for euro transactions. It has pitched for opening up of Indian banking channels in those countries that do banking with Iran.
Federation of Indian Export Organisations (FIEO) has said that although ACU is an easy payment mechanism, there are certain issues related with it such as verification of every transaction.
India mainly imports crude oil from Iran. The bilateral trade between the countries stood at around $13 billion in 2016-17 against $9 billion in 2015-16. In the last fiscal, India imported goods worth $10.5 billion from that country.