India Ready to Pay $700 Million of Its Debts to Iran

India has informed its refineries that it is ready to pay $700 million of their debts to Iran through the United Commercial Bank. Two informed sources told Reuters that this will be the first installment of the debts owed by Indian refineries to Iran, with preparations for the payment being made ahead of the potential lifting of international sanctions against Iran. According to the report published on Thursday, September 10, Indian refineries including Essar, Mangalore, Indian Oil, Hindustan Petroleum, and HPCL collectively owe Iran $6.6 billion, with the first installment of $700 million to be arranged and deposited into Iran's account at the United Commercial Bank. Iran and six world powers reached a comprehensive nuclear agreement on July 14, which is expected to be implemented by the end of this year. India is Iran's largest oil customer after China, but its refineries have been unable to deliver more than half of the oil payments received from Iran to the Islamic Republic since February 2013. India was previously supposed to deposit 55% of the money for oil imported from Iran through Halk Bank in Turkey and did so for a while, but new U.S. sanctions halted this process in February 2013. The remaining 45% of the money for Iranian oil is also deposited in rupees into Iran's account at UCO Bank in India, which the Islamic Republic can only use for importing goods from India. Since the interim nuclear agreement was reached in November 2013, India has released portions of the blocked Iranian funds in the country several times. Indian refineries have paid a total of $3 billion to Iran since the fall of 2013, and the Indian government has asked these refineries to gradually convert their rupees into dollars and euros to avoid a currency liquidity shortage in the country. In past payments, India deposited the released amounts into Iran's central bank account in the UAE through the UAE dirham. In this context, India is paying $1.4 billion of Iran's claims, Bloomberg reports that India is investing $3 billion in Iran's petrochemicals, and there has been a 13% increase in Asia's oil imports from Iran last month.