0756 GMT December 03, 2020
On December 23, 2010, Reserve Bank of India (RBI) had stopped facilitating payments for Iranian crude imports through this mechanism, Business Standard reported.
Under ACU mechanism, imports by nine nations are settled every two months with each member paying for imports after netting out its exports among the union.
The central banks of nine countries in the ACU are India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.
India's Ministry of Commerce and Industry has raised reactivation of this system in a meeting earlier this month with the Department of Financial Services and the RBI, an official said.
Departments of commerce and financial services have decided to set up a joint task force to resolve all bank-related problems of traders, the official added.
Following the imposition of the US sanctions on Iran over its peaceful nuclear program, the payment problem with Iran began as RBI withdrew the ACU mechanism in December 2010.
The Indian ministry has also sought banking ties in Iran for euro transactions. It has pitched for the opening up of Indian banking channels in countries that have banking ties with Iran.
Federation of Indian Export Organizations (FIEO) has said that although ACU is an easy payment mechanism, there are certain issues related with it such as the verification of every transaction.
India mainly imports crude oil from Iran. Trade between the two countries stood at around $13 billion in 2016-17 against $9 billion in 2015-16.
In the last fiscal year, India imported goods worth $10.5 billion from that country.