New Delhi: India’s sudden halting of crude oil imports came as a rude shock for long-standing strategic partner Iran, but Tehran believes purchases will resume as soon as a new government comes to office in New Delhi, Iranian envoy to India Ali Chegeni told ThePrint.
“The Iranian government expects India will expand its relations with Iran in all aspects, especially in economic fields, including oil purchases, once a new government comes to power,” Chegeni said.
The Iranian envoy discussed the oil imports imbroglio in an interview with ThePrint days after Iran Foreign Minister Javad Zarif made a sudden visit to India last week amid his country’s soaring tensions with the US.
The two countries have been on the warpath since last year, when the Trump administration pulled the US out of the milestone 2015 Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA), that rid Tehran of years of international sanctions in exchange for restrictions on its suspected development of nuclear weapons.
Trump said the deal lacked teeth, and threatened Iran’s trading partners with sanctions for continued oil imports beyond a deadline that expired this May.
As a result, India, on 2 May, halted all oil imports from Iran.
Official sources told ThePrint that Zarif was assured by External Affairs Minister Sushma Swaraj during their meeting last week that a decision on oil purchases will be taken when a new government is set up.
“The foreign minister’s visit was crucial at this juncture as he wanted to brief India where it stands as far as the JCPOA is concerned,” Chegeni said.
Weighing in on the country’s threat to junk the tabs put on its nuclear programme by the JCPOA, Chegeni said Iran had just asked the other signatories of the deal — China, Britain, Russia, France and Germany — to step up.
The other signatories of the deal have been critical of the US’ withdrawal.
Chegeni said Iran had clearly told India that it had not withdrawn from the deal — it had been conveyed to New Delhi, he added, that Iran had warned Europe it had 60 days, in accordance with the JCPOA, to prevent US sanctions from impacting the country’s banking and oil sectors.
Also read: US ban on Iran oil exports gives opposition fresh ammo to take on Modi govt
‘Friends, former neighbours’
New Delhi, which imports about 80 per cent of its entire crude requirement, was Iran’s second-largest buyer of oil after China when the US deadline kicked in, according to the Ministry of Petroleum and Natural Gas.
At the time purchase was halted, India was buying over 3 lakh barrels of oil from Iran every day.
Meanwhile, India has been holding negotiations with the US to allow it to import the remaining shipments of Iranian oil for which contracts were signed earlier.
“We expect India to consider Iran as a friend as we have been in the past. Iran and India’s energy relationship is based on accessibility, sustainability, security and reliability,” Chegeni told ThePrint.
“We used to be neighbours until 1947 and we are also neighbours through the sea. Let us not forget Iran was the first country to sell oil to India in exchange of rupees that was based on mutual benefit,” he added.
India to join INSTEX?
European nations looking to bypass US sanctions on Iran oil purchases are working on a non-dollar, barter payment channel — INSTEX or the Instrument in Support of Trade Exchanges — to continue trade with Iran.
Iran has suggested that India join INSTEX, but sources said New Delhi had not made a decision on it yet.
Meanwhile, the European Union (EU) is yet to operationalise the INSTEX and the delay has irked Iran, leading President Hassan Rouhani to threaten withdrawal from the deal this month.
“We hope Europe speeds up the work on INSTEX and injects money in it,” Chegeni said. “INSTEX, in its first phase, will facilitate trade of humanitarian goods such as medicine, food and medical devices, but it will later be expanded to cover other areas of trade, including Iran’s oil sales.”
Delay in Chabahar Port project
While Indian oil imports from Iran have come down to zero, Tehran expects New Delhi to at least speed up work on developing the Chabahar Port, which is located in the country’s Sistan-Balochistan province.
A flagship joint endeavour, Chabahar is believed to hold immense strategic significance for India as it will allow the country direct access to Afghanistan and central Asia, for which New Delhi has to currently depend on Pakistan.
“Our ties with India go beyond oil. We have economic ties across many sectors. The impact of US sanctions will not be felt on the Chabahar project,” Ambassador Chegeni said, “But it needs to speed up work there.”
The first phase of the port was inaugurated in December 2017. Apart from developing the port, the Chabahar project also entails the creation of a rail link from Chabahar to Zahedan within Iran. While a feasibility study on the rail link was completed two years back by the Indian public sector company IRCON, work is yet to begin, the envoy said.
‘Oil will find its way to flow’
The ambassador said that while the sanctions had proved to be difficult for its economy, Iran will find a way to sell its oil.
“We will find ways to sell oil. Just like water, oil also finds a way to flow,” he told ThePrint.
“Yes, we may have some difficulties but we will continue to do business, which is our legitimate right,” he said.
Also read: Inside India’s barrel of concerns: US sanctions, alternative to Iran oil and good old ties
That would be absolutely the right thing to do.