Iran has offered to help India meet its energy needs by reviving the rupee-rial trade for oil and gas exports, Iranian ambassador to India Ali Chegeni said.

Chegeni said that if both countries resume trade in rupees and rials, bilateral trade could reach $30 billion.

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Iran used to be India’s second-largest oil supplier, but New Delhi had to halt imports after former US President Donald Trump pulled out of the Iran nuclear deal and re-imposed sanctions on its oil exports.

“Iran is poised to meet India’s energy security needs by launching the rupee-rial trade for oil and gas exports,” Chegeni said in a statement released this weekend by the MVIRDC World Trade Center.

He went on to say that “a rupee-rial trading mechanism can help companies from both countries deal directly with each other and avoid third-party brokerage fees.”

It can be noted that New Delhi and Tehran had a barter-like mechanism for trade arrangements, where Indian oil refineries paid in rupees to a local Iranian bank and the funds were used by Tehran to pay for imports from India.

This forced Iran to become India’s largest source of crude oil, knocking Saudi Arabia, which used to be the largest supplier, from the throne.

However, after the US re-imposed sanctions, Indo-Iran trade fell sharply from USD 17 billion in FY19 to less than USD 2 billion in April-January of the current fiscal year.

The envoy went on to say that Tehran is also ready to work closely with New Delhi to find new avenues and find alternative routes for the stalled Iran-Pakistan-India pipeline project to transport natural gas to India.

India also used to import various other products from India such as urea, petrochemicals, organic fruits while the Arab nation used to ship agricultural goods, pharmaceuticals, iron and steel and cars, clinker, cement from India.

Iran has introduced a paperless, electronic system for issuing multiple visas for Indians to facilitate exchanges of businessmen, tourists and students, the envoy said.

Earlier this week, the nation’s largest oil refinery and marketing company IndianOil had contracted 3 million barrels of Russian crude and the second-largest BPCL booked 2 million barrels at heavily discounted rates.

Earlier, media reports had said that Russia was offering up to 25 percent discount to India.

Since Russia launched its invasion of Ukraine on February 24, crude oil trading at $93 a barrel has risen to $130 in early March and has since fallen to $100 a barrel.

India relies heavily on imports to meet its energy needs as nearly 85 percent of its crude oil needs must be imported.

Russia is the second largest oil producer and provides 14 percent of the world’s reserves.

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