By RAKESH SHARMA and RAJESH ROY
NEW DELHI -- India on Thursday showed no signs of giving in
to US pressure to reduce its business dealings with Iran, with
the government and a top trade body moving in quite the
Foreign Minister S.M. Krishna, in a written reply to
questions in the upper house of India's parliament, said that
New Delhi is in talks with Iran to ensure uninterrupted crude
oil supplies, as well as to smoothen settlement of
government is studying the impact on India of the problems that
have arisen due to imposition of sanctions against Iran," he
India, which imports about $12 billion worth of crude oil
annually from Tehran, says it won't comply with the US and Europe sanctions against Iran.
Krishna reiterated this stand Thursday, saying that trade
with Iran won't be affected.
This comes just two days after the US State Department said
12 countries - including India and China -remain at risk of
facing financial penalties this year because of their continued
purchases of Iranian oil.
The Iran debate has become a sore point for India-US
relations, with Washington trying to exert pressure on New
Delhi to curtail trade with Tehran.
But oil supplies from Iran are crucial for India, accounting
for more than a 10th of its annual crude imports.
Also Thursday, a senior executive of a trade association
told Dow Jones Newswires that India is aiming to more than double
its exports of agricultural commodities and products such as
medicines to Iran.
The US-led sanctions against Iran are "a good opportunity"
for Indian exporters to fill the supply gap, said Ajay Sahai,
chief executive and director general of the Federation of
Indian Export Organisations.
"We hope to increase our trade with Iran to $6 billion" in
the fiscal year starting April 1, he said. India's exports to
Iran fell 6% in 2011 to $2.4 billion, mainly because of payment
Iran accounts for around half of India's premier basmati
rice exports, and is also a big buyer of its tea.
New Delhi and Tehran recently agreed on a system to bypass
Western sanctions which have made payments difficult.
The new system allows India's oil importers to make 45% of
their payments in rupees, which Iran will park in a local bank
and use to settle payments to Indian exporters.
The problem arose after India's central bank in December
2010 barred Iran-related payments from being processed through
the Asian Clearing Union, a regional clearing house which the
US said was opaque and could be used by Tehran to finance its
alleged nuclear weapons program.
The government started payments through Turkey's Halkbank in
August last year, but this route may be cut off by the
sanctions as well.
Also Thursday, Foreign Minister Krishna said that India is trying to diversify its
sources of crude oil imports to cut dependence on any one
India's crude oil imports from Iran are expected to fall by
8% in the current financial year that ends March 31, to 340,000
Dow Jones Newswires