Exporters urge govt. to revive oil-rice barter mechanism with Iran, Pg10

Key Highlights:

• The government is procuring oil and LNG from Iran after a seven-year gap, raising hopes for restored trade.
• U.S. sanctions waivers for Russian and Iranian oil, and Chabahar port, are expiring in April 2026.
• Exporters are urging the government to revive the oil-rice barter mechanism with Iran.
• 80% of India’s Basmati exports to West Asia are affected by restrictions in the Hormuz Strait.

Detailed Insights:

• The Rupee payment mechanism through UCO Bank, established in 2012, could facilitate trade with Iran.
• In 2019, India ended imports of Iranian and Venezuelan oil and reduced Russian oil imports due to U.S. sanctions.
• India's trade with Iran decreased from $15.7 billion in 2014 to $1.6 billion in 2024 due to U.S. pressure.
• India prepaid its $120 million investment in the Chabahar port project in November 2025.
• The Petroleum and Natural Gas Ministry maintains that oil buying decisions are commercially driven.
• Oil prices remain high, exceeding $110 per barrel, amid Middle East supply disruptions.

Key Concepts Involved:

• Sanctions Waiver: Temporary permission granted by a country to another, allowing specific activities to continue despite sanctions.
• Barter Agreement: Trade system where goods or services are directly exchanged for other goods or services without using money.
• Hormuz Strait: A narrow waterway between Iran and Oman, strategically important for global oil transportation.