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India will continue to buy Iranian oil 'to some extent' in Nov: S C Garg

Agencies/New Delhi, 12 October 13 Oct 18 | 01:21 AM

Economic Affairs Secretary Subhash Chandra Garg

India will continue to buy Iranian oil "to some extent" in November though the imports will be sharply lower than its purchases in the April-September period, Economic Affairs Secretary Subhash Chandra Garg told CNBC TV18 news channel.

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New Delhi has not yet worked out a payment mechanism for continued purchase of Iranian oil, he added.

India has already placed an order to buy 9 million barrels of Iranian oil next month despite US sanctions against Tehran's oil sector coming into force from November 4.

Asserting that trade tensions and rising oil prices are affecting emerging nations, Garg on Friday said G-20 countries should take coordinated action to minimise the negative spillover effects of global risks on developing economies.

During his intervention at G-20 Finance Ministers and Central Bank Governors Meeting in Indonesia's Bali, on Thursday-Friday, Garg also appreciated the progress of work under the Argentine Presidency on developing infrastructure as an asset class, a finance ministry statement said. Garg said risks related to trade tensions, financial vulnerabilities and oil prices have materialised and are having major impact on the Emerging Market Economies.

India's option of raising dollar deposits from non-resident Indians through a special scheme is open but the "appropriate" time is not yet decided, he said.

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Garg said the key triggers to decide on the timing of raising foreign currency deposits from Indians living abroad will be the "movement" in the exchange rate and the "extent of forex reserves".

Speculations have been rife that the government will announce a special scheme for non-resident Indians to raise foreign currency denominated deposits to stem the sharp fall in the rupee, after conducting a similar exercise in 2013 when the country faced its worst currency crisis since 1990s. In the G-20 meeting, the deliberations centred on key risks facing the global economy, enhancing a resilient international financial architecture, financing infrastructure development. Besides, the meeting focused on progress on compact with Africa as well as streamlining of the Global Partnership for Financial Inclusion (GPFI) process, the statement said.

He highlighted the importance of developing global standards and protocols for attracting private funds to the infrastructure space and hoped that the infrastructure agenda of G-20 contributes in this direction.

Garg said India has taken several steps to attract private players in infra financing space such as creating Real Estate Investment Trust Fund, Infrastructure Debt Fund as well as undertaking efforts for monetising brownfield assets.

On ties with Africa, Garg highlighted the $10 billion soft loan facility announced for the continent by Prime Minister Narendra Modi.

He said the investment facilitating schemes such as National Export Insurance Fund, Concessional Financing Facility etc. are in place to encourage private players to invest in Africa and elsewhere.

ALSO READ:  India buying Iran oil, Russian weaponry not helpful: US 

With regard to BRICS Forum meeting, the statement said the meeting focused on reviewing the progress as well as deliberating on the way forward under the upcoming 2019 BRICS Chairmanship of Brazil.

The main issues that came up for discussion were the membership expansion of New Development Bank (NDB), the staggering of schedule of payment of paid-in capital of NDB, the work of BRICS PPP Task Force and examining the possibility of developing a consensus on BRICS Rating Agency, it said.

He also emphasised that the role of BRICS (Brazil, Russia, India, China and South Africa) is to provide broad guidance to NDB and the decisions on managing the micro details should be left to NDB Board of Directors and Board of Governors.

On the BRICS Rating Agency, Garg hinted that the Report of the Expert Group proposed setting up of such an agency which is completely independent and is led by private sector.

He highlighted the need for a rating methodology that takes into account the circumstances of these economies.

In this context, there was a need for BRICS to take lead and work together on setting up of a BRICS Rating Agency, he added.

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