Sweeter than crude? Iran and India launch 'sugar-for-oil' sanctions-busting scheme
India will export raw sugar to Iran in March and April, five trade sources have revealed, marking the first Indian sugar sales to Tehran in at least five years as Iran suffers under sanctions imposed by the United States.
Iran agreed to sell oil to India in exchange for rupees but can only use those rupees to buy Indian goods, Reuters reported. It will do so mainly to buy items it cannot produce domestically
"Oil payments have piled up in UCO Bank. Iran is keen to utilise the payments to buy sugar and other food items," said one source to Reuters.
Traders in India will export 150,000 tonnes of raw sugar in March and April at the rupee equivalent of $305 to $310 per tonne.
Iran's state buyer, the Government Trading Corporation (GTC), purchased the sugar to ensure adequate supplies in the coming months.
Iran has seen protests in the last year over a number of issues, including high prices and food shortages, which have worsened following US sanctions.
Many global traders paused food trade deals with Iran after US sanctions undermined the banking systems used to settle payments.
President Donald Trump withdrew the US from what he called a "defective" multinational nuclear deal and reinstated punishing sanctions last year, crippling the Iranian economy in what officials in Tehran have deemed "economic warfare".
The sanctions isolate Iran from the global financial system and prevents Iran from using US dollars to transact its oil sales.
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