WHY DOES INDIA WANT TO TRADE OIL WITH IRAN IN RUPEES

The Indian government has been working on a plan to trade with Iran in rupees and the first test of this will be the sale of crude oil to India The Iranian government has given permission to the Indian government to use Indian rupees in the payment of crude oil imports from Iran The payment will be carried out through the rupee-rial account This arrangement is expected to be a big boost for the rupee as the Indian rupee will become a recognised global currency The International Monetary Fund (IMF) has also agreed to the USD-free trade with Iran and has given its approval in this regard to the Indian government The rupee-rial account will be a beneficiary of the IMF decision The rupee-rial account was activated by the Reserve Bank of India (RBI) with an aim to facilitate the trade between India and Iran and the opening of the account was a part of the payment mechanism under the India-Iran-Afghanistan Trilateral Agreement on Establishment of International Transport and Transit Corridor The rupee-rial account was expected to be a part of the India-Iran-Afghanistan Agreement on Trade, Transit and Investment The new mechanism is expected to bring down transaction costs, simplify procedures, reduce the turnaround time and reduce the double-payment problem Iran is India's third-largest oil supplier after Iraq and Saudi Arabia In 2013 the India has imported about 5.8 million tonnes of crude oil from Iran The Iranian government wants to increase this to two million barrels per day It is believed that the rupee-rial account could become a part of the payment mechanism for India-Iran crude oil trade The rupee-rial account is expected to bring down the cost of imports and exports between India and Iran https://m.economictimes.com/news/economy/foreign-trade/india-imports-5-82-million-tons-oil-from-iran/articleshow/27536653.cms It is believed that the rupee-rial account will reduce the transaction costs considerably and will also save time as the payment will be made only once The rupee-rial account is expected