Tehran has proposed the use of Rupee and Rial, the respective national currencies of India and Iran, to settle payments in bilateral trade. The suggestion came as Indian Prime Minister Narendra Modi’s National Security Advisor, Ajit Doval, met with his Iranian counterpart, Ali Shamkhani, on Monday.
Shamkhani emphasized that using national currencies for bilateral trade would help Iran and India achieve their joint economic goals, as reported by the Islamic Republic’s official news agency. In response, Doval expressed India’s approval of the recent Iran-Saudi Arabia agreement to reestablish full-fledged diplomatic relations, an agreement brokered by Beijing in an effort to expand China’s influence in the West Asian region.
During the meeting, the Indian and Iranian National Security Advisors also discussed energy cooperation between the two countries, including the potential resumption of crude oil imports from Iran by India. After the Trump administration reimposed sanctions on Iran in 2019, India had ceased purchasing crude oil from the West Asian nation, causing India’s imports from Iran to plummet from $13.52 billion in 2018-2019 to just $0.33 billion in 2020-21.
Despite facing sanctions imposed by the US and other Western nations on Russia, India continued to maintain trade and economic engagements with Moscow. The two nations had established a Rupee-Rouble arrangement for settling payments in bilateral trade. Indian banks, however, have remained cautious about engaging in financial transactions with Russian entities.
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