India is gearing up to overhaul its import strategy and working towards reducing imports of crude oil from Iran.

The government has also denied permission to Irans Parsian bank to open its branch in India. The development comes close on the heels of last weeks visit to Iran by Prime Minister Manmohan Singh to attend the Non-Aligned Movement (NAM) summit. In a note to the Prime Ministers Office (PMO), the Petroleum Ministry has indicated that the import of crude oil from Iran could well be almost 49 per cent lower during 2012-13 than the 200809 figures. During 2008-09, India imported around 21.81 million metric tonnes of crude oil. It declined by 18.5 per cent in 2010-11. It is likely to dip to around 14 million metric tonnes during 2012-13. Apart from the difficulties arising from the U.S. and EU sanctions, the delay in operationalising of rupee payment mechanism has also contributed to the reduction in imports, the note states. The Petroleum Ministry had recently indicated that it had cut the crude oil supplies from Iran by 11 per cent to 15.5 million metric tonnes this fiscal. During 2008-09, Iranian crude oil imports constituted almost 16.4 per cent of the total crude oil imported by India. However, it is likely to be come down to almost 8 per cent during 2012-13. Total crude oil imported from Iran by Indian companies during 2010-11 and 2011-12 is 18.50 million tonnes and 17.44 million tonnes, respectively. The target fixed for import of crude oil from Iran for 2012-13 is about 15.5 million tonnes, Minister of State for Petroleum and Natural Gas R. P. N. Singh informed Parliament in May this year. However, this is likely to go down further to around 14 per cent if the latest note of the Petroleum Ministry to the PMO is any indication. In a related development, the Reserve Bank of India (RBI) has refused to grant licence to Irans Parsian Bank to open a branch in India. The Department of Economic Affairs (DEA) had recommended to the Department of Financial Services (DFS) that the proposals be considered positively. DFS took up the matter with the RBI, and, based on RBIs report, a decision was taken not to agree to Parsian Banks application. Similarly, the application of National Iranian Oil Company (NIOC) to purchase a property in Mumbai for expanding its office has been sent to the Home Ministry for further approval.

Source: www.thehindu.com/business/article3855040.ece