India offers tax breaks on Iran exports despite U.S. pressure

(Reuters) - The Indian government will offer tax incentives to exporters for sales in rupees to Iran, in the latest effort by New Delhi to bolster exports in return for oil from the Islamic Republic squeezed by Western sanctions, a finance ministry official said.

Following U.S. and European Union sanctions against Tehran over its nuclear program, New Delhi is under pressure to cut oil imports from its second-biggest supplier, which provides about 12 percent of its oil needs.

India has publicly taken a stand alongside other rapidly emerging countries, including China and Brazil, that it would follow only U.N. sanctions, a position criticized by conservatives in Washington.

To skirt the sanctions, India this year decided to buy oil through a mechanism that lets refiners deposit rupees, which are not freely traded on global markets, for about 45 percent of Iranian crude purchases in an account at India's UCO Bank. Read More