India has decided to bring down crude oil imports from Iran by 12 per cent, or 1.6 million tonnes (mt), during the current financial year.

Crude imports from the West Asian country for 2013-14 have been pegged at 11.7 mt, compared with 13.3 mt India shipped in the previous fiscal. In 2011-12, the Iranian crude imports were at 18.1 mt.

Banking sources told Business Line that though the import volume is set to come down in 2013-14, in terms of value, the trade figure for the first half of the fiscal saw increase because of changes in the value of the commodity and the currency .

Rupee depreciation against the dollar (as Iranian crude is priced in dollar and 45 per cent of imports are rupee-based payments ) and higher average crude prices have been the primary reasons for the difference.

India had piled up payment arrears of $1.53 billion (55 per cent of crude imported, which is outside the rupee-settled arrangement, over the past few years) until the end of the last fiscal.

Both countries have been trying to find ways to solve the payment issue in view of the sanctions from the UN, European nations, and the US. India’s decision to reduce Iranian crude import is linked to the restrictions. India has also been trying to increase exports to bridge the trade-value gap.

Exports up

Value of Indian exports to Iran during the first six months of 2013-14 has shot up substantially. According to banking sources, exports in the first quarter stood at Rs 6,500 crore against Rs 570 crore in the corresponding quarter last year. The second quarter exports figure was at Rs 6,400 crore (Rs 2,100 crore).

India’s export basket to Iran consists of agricultural food items, such as rice, soya and tea (around 72 per cent), pharmaceuticals (10 per cent), alumina and minerals (5 per cent), iron and steel (4 per cent) and chemicals (4 per cent).

> jayanta.mallick@thehindu.co.in

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