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Iranian minister woos Indian businesses

Associated Press Modified: October 10, 2012 at 8:01 pm •  Published: October 10, 2012

India has been actively searching for investment deals with Iran as an ad hoc barter arrangement to pay its oil bills.

India imports around 70 percent of its oil needs, of which about 11 percent comes from Iran. It has been facing enormous problems over payments for the Iranian oil.

New Delhi initially channeled payments through German-based Europaisch-Iranische Handelsbank. But after the sanctions kicked in, the two countries moved to Turkey's Turkiye Halk Bankasi AS to facilitate payments.

That channel may also become inoperable after EU intervention. In February, Iran and India reached an agreement under which India would pay for 45 percent of the oil in Indian rupees, with the rest to be settled through a barter arrangement in goods and services.

The fallout of the sanctions is beginning to be felt by Iran, its currency and its people.

The Iranian rial, which has lost more than half its value in the past year, last week tumbled to its lowest value against the U.S. dollar — 35,000 rials to a dollar. The currency's plunge was marked by small street protests in the tightly controlled society.

But a defiant Namjoo told journalists that while his country could weather the effect of sanctions, Iran's European neighbors were worse off.

"Iran is a big country. We will survive the sanctions," he said.

India, too, has been slowly easing its dependence on Iranian oil.

India also has strategic interests in the Iranian neighborhood. New Delhi is helping to develop the southern Iranian port of Chabahar and a rail link that will offer it direct access to landlocked Afghanistan and Central Asia.