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Looking to shield its trade with Iran, India rushes to engage European nations

Thursday, May 31, 2018, 18:14
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NEW DELHI: India will soon engage with European nations on measures to keep banking channels operative in order to protect Indian import of Iranian oil following the US decision to abandon the nuclear deal with the Islamic republic and reimpose sanctions.An Indian delegation, comprising senior officials from the ministries of external affairs and petroleum, plans to visit key European capitals early June to get a sense of the continent’s preparedness to keep the nuclear deal alive after the American pull-out, and push for measures that would help shield trade with Iran, officials said.US withdrew from the nuclear deal earlier this month even as other signatories—the UK, France, Russia, China, Germany and the European Union—disagreed with the American move. Some sanctions on Iran will become effective after August 6, and others, including those related to the oil sector, after November 4.“The scene is still unfolding. We haven’t yet come across any signs of hurdles in the banking channels or reinsurance with respect to trade with Iran,” said an official. A functional payment channel and reinsurance are critical to petroleum trade with Iran, the third biggest crude oil supplier to India.When they hold talks with European officials, the Indian delegation will be keen on knowing the steps Europe is taking to keep the banking channels functional after the sanctions. India uses European banking channels and pays in Euro for all its oil imports from Iran. Indian officials haven’t had a chance so far to speak with the US on the likely fallout or the possibility of waivers, an official said.State refiners will act as per the advice of the government on Iran sanctions but no such advice has yet come, Indian Oil chairman Sanjiv Singh said. If supplies from Iran were to get disrupted due to sanctions, Indian Oil will be able to manage suitable replacement from different countries, Singh said.The visit by Indian delegation to Europe follows the Iranian foreign minister’s India trip that sought to immune bilateral interests in the wake of US decision to impose sanctions.Foreign minister Shushma Swaraj is also expected to visit Europe in June where the Iran issue will likely get discussed. After meeting the Iranian minister last week in Delhi, Swaraj said India followed UN sanctions and not US sanctions. Yet Indian companies with links to the US financial system could attract penalty if they didn’t comply with US sanctions.

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