* Trade with Iran becoming tighter - Foreign Minister
* Cenbank against using non-rupee currency for payment
By Nidhi Verma
NEW DELHI, March 22 Energy-hungry India has
sought clarification from the European Union on insuring oil
supplies from Iran as trade with Tehran gets tougher due to
Western sanctions, India's foreign minister said on Friday.
European reinsurance firms under heavy pressure to help
block Iran's oil exports are reluctant to deal with Indian
insurers that want to cover refineries processing Iranian crude.
The minister, Salman Khurshid, said he had asked the
European Union to clarify the situation as he tries to resolve
the reinsurance problem and other issues.
"This is something we have to attend to immediately and
hopefully in the near future we will find some solution,"
Khurshid told reporters in New Delhi.
Trade with Iran "is becoming tighter and tougher", he said.
Europe and the United States introduced tough sanctions last
year targeting Iran's oil exports to force the Islamic nation to
the negotiating table over its disputed nuclear programme.
The head of Indian refiner MRPL said this month that India
may halt oil imports from Iran because local insurers had
refused to cover refineries processing the oil.
EU sanctions have blocked European reinsurers from any
involvement in Iranian oil.
Oil is Iran's biggest income generator and sanctions more
than halved its crude exports in 2012.
India, the world's fourth-biggest oil importer, wants crude
to feed its expanding economy.
New Delhi and Tehran have been scouting for a stable payment
mechanism since December 2010 when India unilaterally ended a
decades-old clearing mechanism under U.S. pressure.
Since February, New Delhi has been paying for its oil
imports for Tehran in rupees after a route for part-payment in
euros via Turkey's Halkbank was blocked.
Khurshid said India's central bank opposed a solution that
would involve settling payment in other currencies such as
roubles or yen.
He said "enormous" funds were lying in Iran's account with
India's UCO Bank and that the resulting trade imbalance with
Iran was "a matter of concern".
India's exports to Iran from April to September 2012
amounted to $1.4 billion - a quarter of the value of its imports
from Iran during the period, according to Indian government
(Reporting by Nidhi Verma; Editing by Tom Pfeiffer)