Pact had been signed by the Indian and Iranian government on Nov. 2 2018 for oil payment in rupees, 50 percent of those payments will be used for exporting items to Tehran. State-owned UCO Bank is expected to announce the payment mechanism in the next 10 days.
Oil payments are being made in rupees only as against earlier arrangements where there was a ratio of 45 percent rupees and 55 percent euros.
Russian and Chinese shipping companies were pitching to facilitate India-Iran trade, the source said. Under U.S. sanctions, India will be allowed to export farm commodities, food, medicines, and medical devices to Iran.
However, items such as petroleum and petrochemical products, automobiles, steel, precious metals and graphite are not allowed to be exported to Tehran.