To sweeten the deal for Iran regarding purchase of oil from that country, India will allow the Persian Gulf nation to use the payments made by Indian refiners to an escrow account to meet the expenses of Iranian students and medical tourists. The two sides have also agreed that reference rate of Financial Benchmarks India (FBIL) will be used as the exchange rate to pay for Iranian oil in the rupee.
During the earlier sanctions era between 2012 and 15, the two countries had put in place a swap facility under which Iran could make payments for imports of medicines, medical devices and food grains from India against the latter’s oil import bill. While this facility will be available during the current sanctions as well, the decision to extend the mechanism to students and medical tourists is expected to make it more favourable for the nation facing the US sanctions.
Currently, 7,000-8,000 students from Iran are present in India across academic disciplines offered by Indian institutes. More than 40,000 Iranians come to India every year for various purposes, including medical treatment. Read more
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