Washington: India cooperated with multilateral efforts to use UN-mandated sanctions to achieve a nuclear agreement with Iran, a US Congress think tank said in a report.
The independent Congressional Research Service (CRS) said in its latest report on Monday that during 2010-2016, India’s private sector described Iran as a “controversial market” – a term used by many international firms to describe markets that entail reputational and financial risks.
The CRS is a public policy research arm of the United States Congress and it makes reports on issues of interest for lawmakers for them to make informed decisions. It works on a non-partisan basis.
It also said that “India began reducing economic relations with Iran in 2010, when India’s central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.
In January 2012, according to the report, Iran agreed to accept India’s currency rupee to settle 45 per cent of its oil sales to India, which Iran mostly used to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts, and other products.
“India reduced its imports of Iranian oil substantially after 2011 – by the time of the JPA (interim nuclear deal), Iran was only supplying about 6% of India’s oil imports, down from over 16% in 2008. India incurred significant costs to retrofit refineries that were handling Iranian crude. However, since the JCPOA, oil imports apparently have increased to close to 2011 levels,” according to the report.
The Joint Comprehensive Plan of Action is an international agreement on Iran’s nuclear programme between Tehran, the P5+1.
“Indian firms ended or slowed work on investments in Iranian oil and gas fields – work that is likely to resume now that sanctions have been lifted,” the report said.
India and Iran are considering using Turkey’s Halkbank to transfer to Iran $6.5 billion for oil purchased by India during 2012-2016, it said.
In 2015, India and Iran agreed that India would help develop Iran’s Chahbahar port that would enable India to trade with Afghanistan unimpeded by Pakistan.
“With sanctions on Iran now lifted, that project no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra Modi visited Iran and signed an agreement to invest $500 million to develop the port and related infrastructure.”
The report came as the Donald Trump administration last week sanctioned dozens of Iranian-linked entities in a move that senior US officials said marked the beginning of an escalating campaign to confront Tehran in the Middle East and restrain its military capabilities.