With the US ending sanctions exemption to India for importing Iran oil after May 1, Iranian Foreign Minister Mohammad Javad Zarif is reaching India late Monday night and will meet External Affairs Minister Sushma Swaraj Tuesday.
Zarif is making the trip three weeks after President Donald Trump decided to squeeze Iran, announcing that the US will no longer grant sanctions exemption to Iran’s oil customers. The end of the waiver means India cannot import oil from Iran, or else its state-owned or private entities will face US sanctions.
According to the Ministry of External Affairs, Zarif is scheduled to meet Swaraj Tuesday morning. Zarif was in Turkmenistan on Sunday and Monday.
The two sides are likely to discuss the impact of the US decision and how to deal with it.
Zarif and Swaraj are also likely to discuss the future of the Chabahar port project because the Trump administration has assured that exemption on Chabahar will continue.
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Sources told The Indian Express that the Iranian oil import issue was flagged during US Commerce Secretary Wilbur Ross’s visit last week, but there hasn’t been any sign of flexibility from the US side.
Sources said that Zarif is going to “brief” Swaraj on the impact of the withdrawal of the Joint Comprehensive Plan of Action (JCPOA), and its short-term and long-term consequences. This is Zarif’s second visit in 2019, as he had come to India in January this year, and had met the Indian leadership.
The US policy towards Iran, which involved withdrawal from the JCPOA, was announced in May 2018, and all countries were given six months till November to bring down oil imports to zero.
President Trump abandoned the landmark deal between P-5+1 countries and Iran, which was criticised and opposed by the remaining signatories to the pact — UK, France, Germany, China and Russia, and Iran.
In November, Washington gave a six-month waiver to eight countries, including India, to bring down oil imports to zero.
Early April, Washington conveyed to Delhi that it has stood by India on the issue of terrorism after the Pulwama attack and expects reciprocity, when it comes to Trump administration’s commitment to disrupt Tehran’s terror network.
The US led the move at the United Nations Security Council to list Jaish-e-Mohammad chief Masood Azhar as a “global terrorist”, and had got an assurance from the Indian government on this issue during the complex web of give-and-take that led to his listing on May 1.
India, which is the second biggest buyer of Iranian oil after China, was pushed by the US to restrict its monthly purchase to 1.25 million tonne or 15 million tonne in a year (300,000 barrel per day), down from 22.6 million tonne (452,000 barrel per day) bought in financial year 2017-18, according to sources.
While India had pushed back last year during the Indo-US 2+2 talks, citing adverse impact on its economy and the inflationary fallout it would have, its response was somewhat muted after the Trump administration decided last month to end the waiver.
After the April 22 announcement, New Delhi had said it was adequately prepared to deal with the impact of the US decision to end waiver.
The official spokesperson for Ministry of External Affairs, Raveesh Kumar, had said the government will continue to work with partner nations, including with the US, to find all possible ways to protect India’s energy and economic security interests.
“The government has noted the announcement by the US government to discontinue the Significant Reduction Exemption to all purchasers of crude oil from Iran,” he had said. “We are adequately prepared to deal with the impact of this decision.”
India has maintained that it will take a decision keeping in mind the “commercial consideration, energy security and economic security” of the country.
India is the world’s third-largest consumer of oil, with 85 per cent of its crude oil and 34 per cent of its natural gas requirements being fulfilled by imports. In 2016, India imported 215 million tonnes of crude oil and at 13 per cent, Iran stood third among India’s biggest oil suppliers, after Saudi Arabia and Iraq at 18 per cent each.