But shortly after a brief trial of the mechanism, it reverted to the old system of taking only 45 percent of the payments due in rupees. "They had given some invoices in rupees for 100 percent but I think lately they have stopped that. So that matter had to be further discussed," Oil Secretary Vivek Rae said Thursday.

India had since July 2011 paid euros to clear 55 percent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 percent due amount was remitted in rupees in accounts Iranian oil company opened in Kolkata-based Uco Bank.

Payments in euro through Turkey ceased from February 6 this year but the rupee payments for 45 percent of the purchases continued through Uco Bank. Iran later agreed to take all of the payments in rupees.

India is keen that the system of full payments in rupee is resumed as it will help it save on the forex outflow. Oil imports have been the biggest factor contributing to a record current account deficit. "That proposal is under consideration to increase import of crude from Iran," Rae said.

India wants to import 11 million tonnes of crude oil from Iran during the remainder of the current fiscal. Asked if the Ministry of External Affairs had any reservation on buying oil from Iran, which is under sanctions of US and other western nations, he said, "They have no reservation. They are very much on board."

On the issue of Iran making any pre-condition for selling oil to India, Rae said, "Iran is very desperate to sell crude oil. They are very much on board. There is no pre-condition." According to Oil Minister M Veerappa Moily, India could save as much as USD 8.47 billion by importing oil from Iran. It imported about 2 million tonnes of crude oil from Iran so far and plans an additional import of 11 million tonnes.

India, which last fiscal paid a record USD 144.29 billion for importing its oil needs, shipped 13.1 million tonnes of oil from Iran.

PTI