Context: Indian exporters have urged the government to revive the rupee-based oil–rice barter mechanism with Iran amid supply disruptions and sanctions uncertainties affecting trade through the Strait of Hormuz and Chabahar port.
- Barter mechanism: Trade without using global currencies; goods/services exchanged directly or via local currency arrangements.
- India–Iran trade (2012 system): Payments for Iranian oil was partly made in Indian rupees, used by Iran to import Indian goods like rice.
- U.S. sanctions: Restrictions on Iran’s oil exports and financial transactions impacted India’s imports since 2019.
- Chabahar Port: Strategic port in Iran developed by India for connectivity to Afghanistan and Central Asia.
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