INDIA SAYS it is determined to continue importing oil from Iran despite EU and US sanctions aimed at stopping trade until Tehran stops what the West insists is a military nuclear programme.
Reacting to US secretary of state Hillary Clinton’s comments that the US was engaging in “very intense and very blunt” conversations with India and others such as China and Turkey to stop oil imports from Iran, New Delhi officials indicated yesterday that they would not be coerced.
India’s finance minister Pranab Mukherjee recently rejected pressure from the Obama administration to join the US-EU led sanctions against Tehran.
India imports about 12 per cent of its oil and gas requirements from Iran for an estimated $12 billion (€9 billion), and maintains it will abide only by UN sanctions and not implement those imposed by individual nations or groupings such as the US and the EU.
India recently used Chabahar port in southeastern Iran for the first time to transport 100,000 metric tonnes of wheat to Afghanistan as part of its humanitarian aid to the war-torn country.
India helped build Chabahar a decade ago to provide access to Afghanistan and central Asia – prohibited over land by neighbouring nuclear rival Pakistan – and is involved in building a 900km rail link from the Zabul iron ore mines in southern Afghanistan to the Iranian port. With Iran and Afghanistan, it has agreed that Indian goods headed for Central Asia and Afghanistan will benefit from tariff discounts at Chabahar.
In addition to its oil needs, India wants to cement ties with a besieged Tehran so as to retain access to Kabul in the run-up to the US withdrawal from Afghanistan and to the Asian republics, where there are vast hydrocarbon reserves that could fuel India’s economic development.
Over the past few weeks a defiant India has been examining ways to step up trade with Iran amid trouble in settling its oil bills as sanctions closed down banking routes.
Much to Washington’s ire, New Delhi is sending a large trade delegation to Iran later this month to explore business opportunities created by western sanctions.
The Associated Chambers of Commerce and Industry in Delhi said the Islamic republic offered massive potential for Indian exports: more than $10 billion (€7.5 billion) a year.
“The potential of trade and economic relations between India and Iran can touch $30 billion by 2015 from the current level of $13.7 billion,” association secretary general DS Rawat said.
An Iranian central bank delegation is currently in Delhi to examine options for India to pay for crude imports. It is negotiating to offset a proportion of this bill in exchange for oil-refining machinery, heavy engineering goods and pharmaceuticals, all badly needed in Iran.
Until recently Indian firms were routing payments through Turkey’s Türkiye Halk Bankasi AS, after EU pressure last year forced German-based Europäisch-Iranische Handelsbank AG to stop handling the payments. It remains uncertain how long this arrangement will continue.