Iran hopes India will seeks another waiver from US sanctions

New Delhi: Iran Tuesday expressed hope India will seek another waiver from US sanctions to continue buying its crude oil, noting that it is the world's fastest-growing major economy's most reliable energy provider.

India in November last year won a six-month waiver to buy crude oil from Iran after it agreed to cut imports and escrow rupee payments.

"Challenges will be overcome, ways will be found. So, you are looking at a country that has not only survived but prospered and achieved progress in spite of 40 years of sanctions. Sanctions are not new for Iran," Iran's Foreign Minister Mohammad Javad Zarif said while addressing a business summit here.

He termed the US sanctions against his country as "purely illegal", saying one country was using its economic might to advance illegality.

While the previous sanctions over its suspected nuclear programme were endorsed by the United Nations, the sanctions Trump administration imposed last year are only by the US.

"Iran is the most reliable energy provider to India. We have not allowed any consideration to impede our relations," he said. "India was on our side (when Iran went through sanctions). We will not forget people who were on our side when better times come."

Asked what will happen at the end of the waiver period, Iran's Deputy Minister of Foreign Affairs Gholam Reza Ansari told reporters here India is trying to extend the waiver.

"As far as I understand Indians are trying to extend these waivers and I think according to our traditional relation between Iran and India they will be successful to receive this waiver as well," he said.

Under the 180-day exemption, India is allowed to import a maximum of 3,00,000 barrels a day of crude oil. This compares to an average daily import of about 5,60,000 barrels in 2018.

India, which is the second biggest purchaser of Iranian oil after China, has since then restricted its monthly purchase to 1.25 million tonnes or 15 million tonnes in a year (3,00,000 barrels per day), down from 22.6 million tonnes (4,52,000 barrels per day) bought in the 2017-18 financial year.

New Delhi will pay its third-largest crude oil supplier in rupees. The government has exempted such payments made to Iran's national oil company NIOC from payment of any withholding tax.

This will help clear close to USD 2 billion of payments Indian refiners are holding for oil they bought from Iran since November.

The rupee pact was signed following the US letting India and seven other nations to keep buying Iranian oil despite sanctions were reimposed on the Islamic state on November 5, 2018.

Iran can use these funds to pay for imports of foodgrains, medicines and medical devices from India, the cost of its missions in the country, direct investment in Indian projects, and financing of Iranian students in India. It can also invest the funds in Indian government debt securities.

Addressing the India-Iran Summit, Zarif said a new trend was being witnessed wherein a single country or an individual is threatening to punish countries which do not violate a UN Security Council resolution, which the US itself proposed.

"There hasn't been a revolution in the US, only a change of government. Even had there been a revolution they could not go back against a security council resolution," Zarif said.

Responding to how the US sanctions have impacted India-Iran economic relations, Ansari said: "Of course the potential between our two countries is great and these sort of unilateral sanctions will create a lot of obstacles which need a lot of efforts to remove those".

Minister of State for External Affairs General V K Singh said both Iran and India have to work together to find ways and means by which they can benefit each other, and the US does what it wants to do.

Responding to a question, Singh told reporters India has always followed an independent policy.

Zarif claimed that Indian farmers were paying 38 per cent more for importing urea fertilisers because of arbitrary US sanctions on Iran while some intermediaries were pocketing huge profits.

"Your farmers are paying 38 per cent more because of an arbitrary imposition by an individual. Is that the kind of future we want to see. Is that the kind of future we will be able to entertain so this is the challenge that we face," the Iranian Foreign Minister said.

He assured that the Persian Gulf nation was the most reliable energy provider for India as it has never allowed any consideration to impede relations with its partners.

India, the world's third-biggest oil consumer, meets more than 80 per cent of its oil needs through imports. Iran is its third largest supplier after Iraq and Saudi Arabia and meets about 10 per cent of total needs.

US President Donald Trump in May withdrew from the 2015 nuclear accord with Iran, re-imposing economic sanctions on the Persian Gulf nation. Some sanctions took effect from August 6, 2018, while those affecting the oil and banking sectors started from November 5, 2018.