With the US sanctions effective
November, jus t about a month to go, India’s concern with crude oil import has
driven it to seek crude oil from Venezuela with a rupee-payment mechanism.
It may be recalled here that earlier
this year in the months of March and also of May, Venezuela has expressed
willingness to accept Indian rupee for its crude so that it can also trade in
Indian food products and medicines.
The Ministries of Commerce, Finance and
Petroleum are looking into the proposal.
The rupee-payment mechanism is not a new
concept, but there is a general agreement that the strategy for Venezuela
cannot be similar to that for sanctions-hit Iran.
If the proposal works out successfully,
the rupee-payment mechanism will prove a boon to Indian exporters, particularly
in pharmaceutical products and non-basmati rice.
. “Rice is well-consumed in Venezuela
and we see a huge potential, provided a proper payment mechanism is
established,” BV Krishna Rao, President of the Rice Exporters Association, has
In the past, in the previous round of
sanctions on Iran, India used rupee-payment and barter arrangements; but, now
the situation is more challenging and difficult with Trump taking a very
hardline approach against Iran; he has said that those who trade with Iran
after November sanctions cannot trade with America.
Private refiners have already decided
not to import oil from Iran which might lead to sanctions thereby losing access
to the US financial system.
The US has not come out with a definite
statement on waiver to India post-sanctions though there appears to be some
softening in the bilateral relationships between Washington and Delhi.