TEHRAN Oct 18 (Shana): Iranian and Indian officials have agreed to extend insurance coverage for Iran’s ships carrying crude and goods to India, Iranian newswires said.

TANKER OPERATOR reported that “The agreement was reached between an Iranian trade delegation visiting India and Indian officials in Mumbai on Thursday,” an informed source told an Islamic republic news agency on Thursday.

“India’s shipping ministry has informed the Indian ports of the extension of Iranian crude and cargo ships,” the source added.

In August, India offered sovereign guarantees for oil refineries importing oil from Iran as the Islamic Republic had increased its oil exports to the South Asian country.

India’s Finance Ministry has decided to consider the ‘facility/sovereign guarantee’ for the South Asian country’s refineries importing crude oil from Iran.

Iran also previously offered to provide sovereign guarantees of its own for oil tankers shipping its crude oil to India.

The offer made to India by Iran’s Ministry of Industries, Mines and Trade covers liabilities between $50 mill and $1 bill per incident through sovereign guarantee and the government special fund.

For the shipping liabilities of less than $50 mill, however, an Iranian consortium led by the Central Insurance of Iran will provide the insurance coverage.

Political analysts believed that Iran’s offered assurances for its crude oil tankers would allay India’s concerns on the issue of insurance, the news agency said.

India has continued crude imports from Iran despite the western sanctions imposed against the oil-rich country.

India’s crude oil imports from Iran have increased by 21.1% in June 2013, compared to a year earlier, despite the US-led sanctions imposed on the Islamic Republic's energy and financial sectors, recent data showed.

Essar Oil purchased 138,900 barrels per day of Iranian crude oil in June, which marked a 16.3% growth, compared to the previous month.

Meanwhile, major Indian oil refiner, Mangalore Refinery & Petrochemicals (MRPL), resumed crude imports from Iran after it halted the procedure in April.

MRPL managing director of the PP Upadhya recently said that the refinery stopped imports because local insurers said they could no longer cover plants that process Iranian crude.

European Union sanctions against Tehran have stopped European insurers, who dominate the marine insurance sector, from offering cover on Iranian crude. The sanctions, which prevent EU member states from purchasing Iran's oil or extending insurance coverage for tankers carrying Iranian crude, came into effect on 1st July, 2012.

On 1st August , 2012, the US Congress approved more embargoes against Tehran, which sought to punish banks, insurance companies and shippers that help Tehran sell its oil. However, the lack of shipping cover has failed to disrupt the flow of Iranian oil to Iran's major customers in Asia - China, India, South Korea and Japan.

Iran announced in July, 2012 that the country has set up a domestic consortium to provide insurance cover for the oil tankers, which carry Iran's oil for exports.

"A consortium consisting of the internal insurance companies led by Bimeh Iran (insurance company) has been set up to provide insurance cover for the oil tankers, which are tasked with exporting Iran's crude and oil derivatives (products)," deputy manager for technical affairs of Bimeh Iran Co Siavash Saeedian told FNA news agency last July.