New Delhi is looking for new ways to buy Iranian oil after banking officials prohibited financial transactions through conventional routes to avoid possible U.S. sanctions targeting Iran.
Indian oil companies may open accounts with the State Bank of India, which would deal with deposits made in the Hamburg's European-Iranian Trade Bank, or EIH, The Wall Street Journal reports.
The EIH isn't targeted by energy sanctions imposed by the United States and the European Union last year, though the U.S. Treasury Department froze its U.S. assets because of ties to the Iranian military.
Financial officials in New Delhi said a delegation was headed to Tehran soon to hammer out the details of a temporary arrangement for oil payments.
Indian Petroleum Minister Murli Deora said the issue would be settled soon.
India last year imported more than 21 million tons of crude oil from Iran, one of the world leaders in energy reserves. Imports for 2011 are estimated at more than 18 million tons.