The crucial issue of continuing oil imports from Iran beyond November 4 — the deadline set by the US for countries to stop their oil dealings with the Islamic nation — is likely to be an important part of the agenda at the Indo-US ‘2+2 dialogue’ next month.

The contentious issue of penal duties by the US on steel and aluminium imports from India and the retaliatory action planned by the country is also likely to be discussed at the meeting.

“India definitely wants to continue purchasing oil from Iran. But, much depends on the US stance on the issue which has not yet been made clear. If the US decides to take a rigid stand, then many private companies may stop importing as they have an exposure in the US and wouldn’t want to risk sanctions. But we expect Washington to be reasonable in its approach. Hopefully the ‘2+2 dialogue’ will make things clearer,” an official said.

US Defence Secretary James Mattis and Secretary of State Michael Pompeo are scheduled to travel to New Delhi to hold discussions with their Indian counterparts Nirmala Sitharaman and Sushma Swaraj on September 6. The ‘2+2 dialogue’ will cover a broad range of bilateral, regional and global issues of shared interest, with a view to strengthening strategic and security ties between the two countries, according to the Ministry of External Affairs.

On the issue of aluminium and steel levies imposed by India, the official said New Delhi will try to convince Washington again to roll-back the duties which had been imposed on the ground of security threat. “India has held back retaliatory action against the unilateral duties imposed by the US as it hopes that the matter will be sorted out at the high level meet in September,” the official said.

Major supplier

On oil, New Delhi is hopeful that the US will be flexible in its approach as it realises that Iran is a major supplier of crude to many countries, including India, and it may not be feasible for them to stop imports completely. “The US realises that it might not be possible for other suppliers like Saudi Arabia to fill the gap completely if countries like India stop their sourcing from Iran. What Washington may be ready to accept is a cut down in imports from Iran, by say 30 per cent or 50 per cent. It could then exempt India from sanctions,” the official said.

Indian oil companies have already started lowering their oil sourcing from Iran, but are not happy about it. Iran is not only a reliable supplier of crude for India, it is also one of the cheapest as it offers discount on freight and long credit periods to buyers. Iran was the third largest supplier of oil to India, after UAE and Iraq, in 2017-18.

While US President Donald Trump, in April this year, decided to opt out of the nuclear accord that Iran had reached with the US, UK, France, China, Russia and Germany in 2015, the others, including the European countries, have stuck to the deal and have refused to impose sanctions against the country.

Last week, Iranian officials reportedly urged the European countries to lay out plans for maintaining oil and banking ties to deal with impending US sanctions.

“Iran has been an important strategic partner for India for years. Bilateral relations should not be allowed to get affected due to the current crisis,” the official said.

Related Topics