Indian banks ask exporters to close Iran deals due to sanctions
NEW DELHI (Reuters) - Two Indian banks have asked exporters to complete their financial transactions with Iran by August in response to the threat of new U.S. sanctions, according to the country's main exporters' organisation and bank letters seen by Reuters
NEW DELHI (Reuters) - Two Indian banks have asked exporters to complete their financial transactions with Iran by August in response to the threat of new U.S. sanctions, according to the country's main exporters' organisation and bank letters seen by Reuters.
U.S. President Donald Trump earlier this month pulled out of the 2015 nuclear accord with Iran and ordered the reimposition of U.S. sanctions.
India and Iran have long-standing political and commercial ties, but New Delhi has been careful to not fall foul of U.S. sanctions on Iran.
The Federation of Indian Exporters Organisation (FIEO) said IndusInd and UCO, the two banks facilitating exports to Iran, had set August 6. as the deadline for winding up deals.
"IndusInd and UCO bank are telling exporters that you complete all Iran business by August 6," Ajay Sahai, director general of FIEO, told Reuters.
Indian exporters mostly receive payments in rupees for exports to Iran, under a mechanism devised in 2012 when banking channels were restricted due to the U.S. sanctions.
India, Iran's top oil customer after China, had implemented a barter-like scheme that allowed it to make some oil payments to Tehran in rupees through UCO Bank.
IndusInd Bank in a May 24 letter, seen by Reuters, asked Indian exporters to provide a declaration from customers that the entire export LC (letter of credit) transaction would be completed before August 6, 2018.
An Indian exporter executing Iranian orders worth 90 million rupees said he was worried because he would get some payments in the second half of August.
"How does an exporter feel safe? I don't know whether I will get my money or not," said the exporter, who did not wish to be identified. He said payment for an Iranian export order normally takes between one to one-and-a-half months.
Indian companies receive payments for exports to Iran using the oil payments held in rupee balances at UCO.
The mechanism helped India to narrow its trade deficit with Iran from about $11.3 billion in 2011/12 to about $3.5 billion in 2015/16, when the Iran sanctions were lifted.
In the fiscal year to March 2017, India's trade deficit with Iran widened to $8.24 billion, according to the government data.
UCO Bank told the exporter mentioned above that payment would be made only if the Iran account had enough money.
"Payments will also be subjected to any trade restrictions/currency restrictions being put in place by U.S.A. post 08-05-2018 and as per the Government of India guidelines on the date of claim," UCO said in its letter to the exporter dated May 29, which was seen by Reuters.
UCO Bank chairman R. K. Takkar told Reuters his bank was continuing with the rupee mechanism. He refused to elaborate on the letter issued by his bank, and said Iran had 18 billion rupees in its account with UCO.
(Reporting by Nidhi Verma; Editing by Sanjeev Miglani. Editing by Jane Merriman)
This story has not been edited by Firstpost staff and is generated by auto-feed.
also read
France, Germany to agree to NATO role against Islamic State - sources | Reuters
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
China's Xi says navy should become world class | Reuters
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.