Indian refiners have cleared part of the $6.4 billion owed to Iran for crude oil imports in euros through Turkey's Halkbank, three sources privy to the payment said on Saturday.

This is the first payment to Iran by India since the lifting of Western sanctions against the Persian Gulf nation earlier this year and comes just ahead of Prime Minister Narendra Modi's visit beginning on Sunday.

State refiner Mangalore Refinery and Petrochemicals Ltd paid $500 million while Indian Oil Corporation has settled $250 million through the Union Bank of India, the sources said.

The refiners had been holding back 55 per cent of the oil payments to Iran after the route to make payments through Halkbank was stopped in 2013, although payment of some of those funds was allowed after an initial temporary deal to lift the sanctions.

It is not yet known when the second instalment will be paid, the sources said.

India is one of the biggest buyers of Iranian crude, and is set to import at least 400,000 barrels per day (bpd) from Iran in the year from April 1. But it built up a backlog of payments when Iran was under sanctions.

Mr. Modi is making a first trip to Iran since he took office in 2016, aimed at deepening energy ties. During the visit, India will sign a contract to build and operate the port of Chabahar on the southern Iranian coast that is aimed at boosting connectivity with Afghanistan and central Asia.