India has signed an agreement with Iran to pay for its crude oil in national currency instead of dollars the Business Standard newspaper reported, citing an anonymous source familiar with the move.
The memorandum of understanding between the countries, which cemented the decision to ditch dollars in the oil trade, was signed by Tehran and Delhi on 5 November 2018, when the US announced new sanctions against Iran. It's notable that on the same day, Washington issued temporary waivers to 8 countries, including India, allowing them to buy Iranian oil without fear of being sanctioned.
According to the Business Standard's source, money for the Iranian crude will be transferred to a National Iranian Oil Co (NIOC) bank account at the Indian UCO Bank. What is more, half of this money is set to be spent on exports of Indian goods to Iran.
India is the second biggest importer of Iranian crude, with China occupying first place. The country has reportedly limited its oil imports from the Islamic Republic from 452,000 down to 300,000 barrels per day to meet the conditions of the 180-day US waiver.
The US imposed a new round of sanctions against Iran on November 5, following Washington's withdrawal from the Joint Comprehensive Plan of Action (JCPOA). Sanctions affected the country's banking, energy, and shipping sectors. The US allowed 8 countries to continue buying Iranian oil for 6 months — Greece, India, Italy, China, Taiwan, Turkey, South Korea, and Japan.