India's central bank instructed the country's lenders to stop processing current-account transactions with Iran using the Asian Clearing Union, and told Indian firms they couldn't use the mechanism to pay for oil or gas imports.

WSJ: India, Iran Try New Conduit for Oil Payments

Trade settlement between the two countries was hit after India's central bank barred Iran-related payments from being processed through the Asian Clearing Union, a regional clearinghouse which the U.S. says is opaque and could be used by Tehran to finance its alleged nuclear-weapons program.

WSJ: India Plans to Step Up Oil, Gas Investment in Africa