India has paid off all oil debts accumulated this year due to a sanctions-related problem, Central Bank Governor Mahmoud Bahmani told the official IRNA news agency on Sunday. "Although all the $5 billion of India's oil debt has been cleared, because of selling oil again Iran will always be a creditor of that country," Bahmani said, adding the payment was received in cash and not in kind through a bartering system.
"So far, Iran has not had a bartering system with India for receiving oil debts but if it happens it would be for those products which are of a high quality and are needed by Iran," he said.
India, Asia's third-largest economy and Iran's second oil buyer after China, racked up the debt after the Reserve Bank of India scrapped a clearing house system last December - a move welcomed by the United States which is trying to isolate the Islamic Republic over its nuclear program.
Indian companies are making the payments in euros via Turkish state-owned Halkbank , Indian officials have said.