India may be settling Iranian oil payments largely in rupees, government sources say

India may be settling its oil payments to Iran largely in rupees, according to government sources familiar with the matter. Officials indicated that the rupees accumulated by the Iranian side can be used to procure Indian goods and services, citing examples ranging from basmati rice to tea.

The description points to a mechanism in which rupee balances are deployed for purchases within India’s market. The comments were attributed to government sources and officials, who framed the arrangement around the use of rupee-denominated balances for Indian goods and services, including staples such as basmati rice and tea.

The indication of a rupee-led settlement underscores an approach in which accumulated balances are tied to procurement from India, as outlined by the officials.