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"I believe it may not be easy to come to a conclusion on this matter in the upcoming discussions," Foreign Minister Koichiro Gemba said. Western sanctions could make it harder for India to pay for the oil it gets from Iran. Past sanctions have already delayed payments by Indian oil importers, who have had to scramble to find banks willing to handle transactions with Iran. India's central bank governor D. Subbarao said last week that the current payment mechanism was "working fine," though India was also "exploring other options," which he declined to discuss. Indian companies now reportedly route payments through Turkey's Turkiye Halk Bankasi AS, after EU pressure forced German-based Europaisch-Iranische Handelsbank AG to stop handling the payments last year. IHS Jane's energy analyst Catherine Hunter said Turkey is unlikely to shut down that route immediately, noting that Turkish oil refiner Tupras also uses this payment mechanism. "But this route remains susceptible to external pressure," she added by email. "India is now discussing rupee based payments and direct trade
-- however that has a number of drawbacks for Iran given the trade imbalance and restrictions on use. China isn't publicly discussing options but I imagine other currency payments are also on the cards there." The U.S. and its allies believe Iran is using oil revenues to develop nuclear weapons, but Tehran insists its nuclear program is purely for peaceful purposes.
[Associated
Press;
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