Central Bank Says India Paid $5 Billion Iran Oil Debt in Full

India has fully paid its $5 billion oil arrears to Iran without bartering to bypass sanctions-related payment problems, the official news agency IRNA reported Sunday quoting Iran's central bank chief.

"While all of India's $5 billion oil arrears have been paid to Iran, the country will always have some leftover debt (to pay) due to fresh oil sales," Mahmoud Bahmani said.

"Despite India favoring exchange of goods and barter for paying its debt, Iran refused this proposal... Iran has not so far bartered for oil payments," he added.

Last month, New Delhi finally resolved a payment row with Tehran after more than six months of struggling to pay its dues amassed as a result of international banking sanctions on Iran over its suspected nuclear program.

As a result, various Asian and European banking channels used by New Delhi to pay Iran, Germany in particular, were closed off.

India is Iran's second largest oil client after China, and absorbs about 20 percent of the Islamic republic's crude exports.

The South Asian country buys about 400,000 barrels of Iranian crude per day, with annual oil trade between the two nations standing at an estimated $12 billion.

Tehran has been slapped with several rounds of international economic sanctions over its program of uranium enrichment, which Western powers suspect has a military dimension, despite Tehran's repeated denials.

The United States has also imposed its own unilateral sanctions on Iranian banks, posing risks for foreign companies which deal with them.

Indian Petroleum Minister S.Jaipal Reddy said in August his country would use a banking system via Turkey, which has boosted its political and economic relations with Iran in past year by refusing to adopt U.S. and European sanctions against its neighbor.