Idnian external affairs minister S. M. Krishna made it clear that Iran remained India’s important source for oil given the growing domestic demand for crude.

In the backdrop of US pressure to reduce oil imports from Iran, India on Thursday said unilateral sanctions should not impact upon its “legitimate trade interests” with the Persian nation.

 

Indian Foreign Minister S M Krishna made it clear that New Delhi will not bow to U.S. pressure to reduce its oil imports from Iran and called Iran a "key country" for meeting India’s growing energy needs.

Krishna also said India feels no obligation to observe United States’ unilateral sanctions on Iran, insisting that India will not cut its “legitimate” trade with Tehran.

The U.S. and its European allies have imposed sanctions against Iran outside the UN resolutions for its nuclear program which Tehran insists is only meant for peaceful purposes.
 

"As far as other sanctions, those decided either unilaterally or regionally, we are aware of such measures. In a globalised world, such actions tend to impact on the market and our commercial entities take these into account. Such measures should not impact legitimate trade interests," Krishna told reporters in a join press conference with Iranian Foreign Minister Ali Akbar Salehi in New Delhi.

"As far as the question of sanctions is concerned, let me say that the United Nations Security Council in its wisdom has passed resolutions on the issue and India has always abided by such resolutions of the Security Council as a responsible member of the international community," Krishna stated.

 

Amid mounting Western pressure, India Thursday underlined that unilateral sanctions should not impact upon its "legitimate trade interests" with Iran as Tehran urged New Delhi to hike its crude-oil purchases.

Barely a month before the U.S. and EU sanctions against Tehran become operational, India described Iran as "a key country" for its energy needs and underlined that unilateral sanctions should not impact upon its "legitimate trade interests" with Tehran.

 

Responding to a question on the proposed Western sanctions, External Affairs Minister S.M. Krishna stressed that India has always abided by the resolutions of the United Nations Security Council on the Iran issue, but indicated New Delhi's unease with unilateral sanctions.

"As far as other sanctions, those decided unilaterally or regionally, we are aware of such measures. In a globalised world, these actions can have an impact on the markets," Krishna said at a joint press conference with Iranian foreign minister Salehi.
 

"Our commercial entities take these into account. Such measures should not impact on legitimate trade interests," he added.

As the two countries look to bypass sanctions by using the Indian rupee to settle part of their payments, Krishna said Iran is "an important neighbor and crucial trade partner for India and also a major source of our energy supplies."

"It is also a gateway for India to Central Asia. India and Iran share an interest in the stability of Central Asia and the Gulf. We also face threats from terrorism and extremism."
 

Pitching for greater economic and energy ties with India, the Iranian foreign minister said that Iran's total trade with India is now worth $16 billion.

"Iran is a reliable partner for reliable energy source for India, which has growing energy needs." "But this is not proportionate to the potential of these two countries. We are hoping and looking into ways of raising this bilateral trade between India and Iran," he said in remarks that are bound to upset Washington and its allies.
 

"India should look for resources that are reliable. Iran will remain a reliable partner for India," said Salehi.
 

India currently imports around 10-11 percent of its oil requirements from Iran and has marginally reduced its imports as it seeks to diversify its energy sources. U.S. Secretary of State Hillary Clinton is understood to have taken up the issue of Iranian oil imports with Krishna during her visit to New Delhi May 8. The issue is expected to figure in discussions again when Krishna goes to Washington for the India-US strategic dialogue June 12.

The U.S sanctions against Iran's central bank are scheduled to take effect on June 28, and the European Union's oil embargo is due on July 1.

Lauding India's commitment to non-alignment, Salehi said he will hand over the invite for the NAM summit when he meets Manmohan Singh Friday.

Salehi also updated Krishna on the recent discussions between Iran and the P5+1 in Baghdad on Tehran's nuclear program. India reiterated that the Iranian issue should be resolved through diplomacy.

Focus on Iran in foreign trade policy likely: India

 

NEW DELHI: Disregarding sanctions threatened by the U.S. and the EU against countries doing business with Iran, New Delhi is considering incentives for exporting select products, such as pharmaceuticals, diagnostic equipment and auto parts, to the country to improve its trade balance and help set-off part of its oil import bill. 

 

"We have considered demands put forward by the industry for incentivizing exports of products, such as auto parts, pharmaceuticals, engineering goods, oil equipment and diagnostic products, to Iran," a government official told ET. 

 

While a final decision on the markets and products to be incentivized in this year's annual supplement to the Foreign Trade Policy (FTP) on June 5 is tied to the funding sanctioned by the finance ministry, Iran is on the list of favored destinations. 

 

"India has been respecting the sanctions imposed by the UN against Iran. Our exports do not include products disallowed by the UN. However, we are under no compulsion to listen to the U.S. or the EU," the official added. 

 

The government's market-linked focus product scheme provides incentive for exports of specific products to target markets in the form of duty-free import scrips that could be used to import items without paying duties to the extent of the scrip value or sold in the market. 

 

Exporters say they would benefit by any attempt of the government to incentivize sales to Iran.

 

India and Iran have sorted out part of the payment problem, triggered by U.S. curbs on foreign banks dealing with Iran with the operation of a new rupee payment mechanism. The system allows about 45% of India's oil imports from the country to be settled against exports made to Iran through the UCO Bank in India and Persian Bank in Iran.
 

(Source: indiatimes)