According to a report published by the Economic Times, India is all set to continue importing oil from Iran despite the looming threat of US sanctions kicking in from November 4. State refiners Indian Oil Corp will import 6 million barrel and Mangalore Refinery and Petrochemicals will import 3 million barrels from the Persian state in November while India is zeroing in on an alternative payment channel, preferably rupee trade as dollar payment channels will be blocked as the sanctions come into force.
Apart from the several trade sanctions already imposed on Iran, the United States of America plans to impose oil-related sanctions from November with the hope of bringing the Persian state to negotiating table over its nuclear advancement and ballistic missile programme. Although, Iran says it has abided by the 2015 nuclear deal, which was struck with five other world powers, besides the United States.
Sources claim India and Iran are discussing reverting to rupee trade after the sanctions are kicked in. A source said that Iran has been irregular in taking rupee payments for oil it sells. “This rupee it uses for paying for imports of medicines and other commodities. A similar arrangement is in works,” he added. UCO Bank and IDBI Bank have been identified to make the payments as the two banks have no exposure to the US financial market. Sources claim that this time around it is expected that 100% trade payment will be done in Rupees.
India is planning to import about 25 million tonnes of crude oil from Iran in the current fiscal, up from 22.6 million tonnes imported in 2017-18. But the actual volumes imported may be quite less as companies like Reliance Industries have totally stopped buying oil from Iran in a hope of winning a sanction waiver from the US.
As an attempt to lure India, The United States of America is now actively considering waivers and hoping to dissuade Indian government from buying Iranian oil. The US official said that it was a first time that the US government is in the process of considering waivers. Secretary of State Mike Pompeo said in India last month that some buyers of Iranian oil would take a “little bit of time” to unwind their trade with Iran and their administration are weighing the proposition of waivers on embargo but warned that it will be time-bound.
Coming on the heels of India’s procurement of S-400 Triumf Air Defence System from Russia despite strong reservations raised by the USA, in the diplomatic circles, it is considered as an audacious move by India, defying the US yet again and continuing their trade with the ostracized nation. Of-late India has shown the strength and appetite to go against powerful nations to pursue her interests. The age-old adage of “Nation-states are driven by their self-interests” is truly manifested in letter and spirit by India in the last few months when it stood up against the irredentist claims made by bullying China in Doklam and recently, when it refused to cower down by the USA over signing the deal for S-400 Triumf with Russia.
