India has announced plans to provide a state guarantee worth US$327mn to refineries that use Iranian oil in order to boost imports
The Indian government sources said that Iran has agreed to be paid in rupees, which means India would get oil at a cheaper price.
The Finance Ministry is also willing to consider covering half of the planned fund for underwriting insurance, sources added.
Two state-run refiners have had to halt imports from Iran since April this year because of problems in securing insurance for their refineries. That cut India’s imports from Iran by more than half in June 2013.
If the Ministry’s suggestion goes ahead, Indian refiners would be able to take up local insurance backed by General Insurance Corporation (GIC), which can tap the government fund and sovereign guarantee.
For shipping to India, Iran has offered sovereign guarantees of up to US$1bn for its containers and crude oil vessels.
