Iran oil and Indian economy

India is apparently still not off the hook as far as America's Iran-related sanctions are concerned. Informed sources say the US is expected to review India's case, along with that of five other nations granted exemption on Monday, after a period of six months on December 11 to see if New Delhi has further slashed its oil imports from Iran or not.
''India can breathe easily for sometime but it must make sufficient progress in reducing its dependence on Iran to meet its crude requirement in the next six months or the threat of sanctions could resurface,'' sources added.
It is, however, candidly acknowledged in official circles that the Indian economy, already in a bad shape, would have suffered even more had India also become one of the countries attracting the crippling US sanctions which come into force from June 28.
The sanctions would have banned any Indian bank involved in the oil trade with Iran from dealing with its American or European counterparts. India has already been struggling for quite some time to find a viable mechanism to pay for Iranian oil after the Reserve Bank of India was forced by sanctions on Iran to scrap the Asian Clearing Union, which served as a clearing house for trade with Iran.
For a while, India made its oil payments through a German bank and, later, through a Turkish bank. However, the proposed US sanctions have made these options also almost impossible.
India, meanwhile, bargained with Tehran to accept Indian Rupees for its oil payments. An Iranian delegation is currently visiting India to explore the possibility of importing wheat from this country in exchange for the oil dues of the Islamic republic. There are also reports about the unavailability of funds with the UCO Bank in the Rupee account which has affected India's exports to Iran.
The sanctions would have impacted India largely because Iran is India ’s second largest oil supplier after Saudi Arabia. India was importing some 12 per cent of its overall oil purchases from Iran before the US announced its decision to impose sanctions.