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Indian state-owned refiners halts oil imports of 173,000 barrels per day unless an insurance arranged by Teheran is allowed for by the Indian government. India's state-run refiners need government permission to import oil on a Cost, Insurance and Freight (CIF) basis. Moreover, federal policy requires refiners to favor Indian insurers and shippers over foreign ones. This is achieved by buying only on a Free on Board (FOB) basis.
Last fiscal year India imported 127.8 million barrels. Iran accounts for almost 12 percent of India's oil imports.
The Indian government announced it will impose cuts amounting to 11 percent before the June 28 deadline imposed by the US, which aims to encourage countries to end or sharply reduce their oil imports from Iran. The US government will grant waivers to countries if they meet the deadline.
However, US officials have already said that the US government wants to see even larger cuts from India, questioning whether 11 percent should be enough for the country to earn a waiver.