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Tuesday, July 14, 2020

Next Govt will weigh factors, decide on oil import: India to Iran

With the US ending sanctions exemption to India for importing Iran oil after May 1, Zarif’s trip came 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.

Written by Shubhajit Roy | New Delhi | Updated: May 15, 2019 6:48:14 am
Next Govt will weigh factors, decide on oil import: India to Iran External Affairs Minister Sushma Swaraj and Iran’s Foreign Minister Mohammad Javad Zarif in New Delhi. (PTI)

India Tuesday told Iran that a decision on importing oil will be taken “after the elections”, and after weighing factors including “commercial consideration, energy security and economic interests”, sources said. While Delhi has previously maintained that commercial, economic and energy security factors will determine its decision, but this is the first time it has left the decision to the next government that comes to office after May 23.

This was conveyed by External Affairs Minister Sushma Swaraj to visiting Iranian Foreign Minister Mohammad Javad Zarif at their meeting Tuesday. Zarif, who reached Delhi late Monday night, has already been to Russia, China, Turkmenistan, and Iraq over the last few days. His visit comes in the backdrop of rising tensions between Iran and the US, and the crisis in the Persian Gulf.

After the bilateral meeting with Swaraj, Zarif tweeted: “Just had excellent talks in Turkmenistan and India. Those who actually live in our fragile neighborhood have a real national security interest in promoting peace, stability, cooperation and connectivity. Iran remains a most accessible, efficient, sustainable and secure partner.”


Challenge for Delhi is securing supply line

The sudden visit by the Iranian Foreign Minister is to secure support for Tehran in its tussle with Washington. While Delhi has left the decision on oil imports to the next government, it will have to secure alternate supply sources to mitigate the adverse economic fallout due to the disruption.

With the US ending sanctions exemption to India for importing Iran oil after May 1, Zarif’s trip came 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.

Sources said the visit of Iranian Foreign Minister took place at “his own initiative” to brief the Indian side on the Iranian approach to the recent developments in the region, including on the Joint Comprehensive Plan of Action (JCPOA), and to review bilateral cooperation.

The US withdrawal of 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 the P-5+1 countries and Iran, a move which was criticised and opposed by the remaining signatories to the pact — UK, France, Germany, China and Russia, and Iran.

Simply put: Why Iran minister’s visit matters

In November, Washington gave a six-month waiver to eight countries, including India, to bring down oil imports to zero.

A source said Zarif recalled the steps announced by Iranian President Hassan Rouhani on May 8, including decisions linked to the export of enriched material and heavy water. He also mentioned that a 60-day timeline has been given to EU-3 and other parties to JCPOA for restoring the oil and banking channels, the source said. This indicates it is willing to negotiate with American interlocutors on the issue.

Sources said Swaraj conveyed to Zarif that India would like all parties to the agreement to continue to fulfil their commitments and all parties should engage “constructively” and resolve all issues “peacefully and through dialogue”.

On purchase of oil from Iran, “Swaraj said that a decision will be taken after the elections keeping in mind our commercial considerations, energy security and economic interests,” the source said.

On the crucial and strategic Chabahar port in Iran, sources said “both sides expressed satisfaction at the operationalization of the interim contract on the Chabahar Port between India Ports Global Limited (IPGL) and Ports and Maritime Organization (PMO)”.

Both sides shared their views on the situation in Afghanistan and agreed to maintain close coordination on the evolving situation, sources said.
The official spokesperson of the Ministry of External Affairs, Raveesh Kumar, said Swaraj held “constructive” discussions with Zarif on all bilateral issues of mutual interests.

“EAM @SushmaSwaraj and Iranian Foreign Minister @JZarif held constructive discussions on all bilateral issues of mutual interest. Good exchange of views on the evolving regional situation, including Afghanistan,” Kumar tweeted.

This is Zarif’s second visit in 2019 — he had come to India in January this year, and had met the Indian leadership.

The US pressure on India has been relentless these past few weeks. 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 the 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 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.

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.

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