India, US to hold talks soon on Iran sanctions
NEWDELHI: A team of US officials is expected to visit India soon to hold discussions on the sanctions on Iran and their impact on India’s oil imports, persons familiar with the development said, adding that this would help New Delhi get some clarity on the issue.
Meanwhile, India is looking at various options, including reviving the rupee-rial mechanism used between 2012 and 2015 (when, again, there were western sanctions against Iran), to get around the US’ insistence on the sanctions, one of the persons added.
According to this person, there is “informal indication” that the US might see India’s investment in the Chabahar port in Iran as something outside the scope of the sanctions because of its importance to Afghanistan.
Ports and Shipping will also come under US sanctions on Tehran that follow President Donald Trump’s announcement in May that the US was withdrawing from the Iran nuclear deal midwifed by the Obama administration in 2015.
The Chabahar port gives landlocked Afghanistan access to a sea-route for trade and could reduce its dependence on Pakistan. The port would also give India access to Afghanistan and Central Asia. Iran is India's third- largest oil supplier after Iraq and Saudi Arabia.
Iran supplied 18.4 million tonnes of crude oil to India between April 2017 and January 2018 (first 10 months of fiscal 2017-18).
“Iran is an important partner for us and a major source of our oil import,” the first person added.
The US has told India and other countries to cut oil imports from Iran to "zero" by November 4 or face sanctions, indicating that there would be no waivers to anyone. But subsequently, US officials said that they would look at relaxation to ‘friends and allies’ who would slash the oil import from Iran in the next few months.
“We understand from certain statements that the US is prepared to work with countries that are reducing their oil imports on a case-to-case basis”, the first per- son said. “The question is what do we see as a national interest and how do we explain our case to the US. That is still to be done.”
The rupee-rial mechanism was put in place in 2012 to circumvent sanctions against Iran. Though the mechanism is still active, its importance has come down after sanctions were removed in 2015. Under the mechanism, India used to pay in euros to clear 55% of its dues to Iran (through the Ankara-based Halk bank).
The remaining 45% payment was remitted in rupees in the accounts of Iranian companies in the state-owned UCO Bank; this money was used by Iran to pay for its imports from India.
Last week during her visit here, US envoy to the United Nations N Nikki Haley had said that India should snap trade ties with Iran.