The falling value of the rupee has prompted India to increase planned crude imports from Iran to save up to $8.5 billion in foreign exchange.
In line with U.S. and international sanctions, India had cut crude imports from Iran by 26.5 percent during 2012-13, buying just 13.1 million tonnes, against 18.1 million tonnes the previous year, the Hindu reported.
But Tehran allows payment in rupee, unlike most other sellers.
Petroleum and Natural Gas Minister Veerappa Moily has formally proposed big buying increases from Iran to Prime Minister Manmohan Singh.
Additional imports of 11 million tonnes would save India $8.47 billion in foreign exchange (assuming crude is priced at $105 a barrel).
India pays Iran in rupee through a UCO Bank branch in Kolkata, the Hindu reported.
Iran was India’s second biggest supplier after Saudi Arabia in 2010-11, the paper said. But during 2012-13, when sanctions kicked in, Iran supplied only 13.1 million tonnes, falling behind Saudi Arabia, Iraq, Venezuela, Kuwait and the United Arab Emirates.