India will set up an insurance fund worth 20 billion rupees ($364 million) to cover refiners buying crude from Iran, a move that may help them continue purchasing from the Persian Gulf state.
The fund, to be managed by India’s General Insurance Co., will start after the refiners contribute money to it, Banking Secretary Rajiv Takru said in New Delhi today. The fund will not be guaranteed by the state, he said.
Indian processors may cease buying Iranian crude as local insurers refuse to cover the risks for using the oil, P.P. Upadhya, managing director at Mangalore Refinery & Petrochemicals Ltd., said March 8.
The U.S. and its allies enacted sanctions in July to restrict Iran’s oil exports, its largest source of revenue. The countries are trying to pressure the Persian Gulf nation to curb its nuclear program, which they say is designed to develop an atomic weapon.