With a lot at stake in Iran, India on Wednesday urged the US and its allies to engage constructively with Tehran and resolve issues arisen after Washington pulled out of the Iran nuclear deal.

US President Donald Trump had on Tuesday announced withdrawal from the Joint Comprehensive Plan of Action (JCPOA), formed in 2015 to rein in Iran’s nuclear programme.

Trump termed the agreement as “decaying and rotting” while announcing his decision to pull out of the six-nation pact. The move is expected to be followed by economic sanctions against Iran which may push the oil prices globally.

Iran is India’s third biggest supplier of oil after Iraq and Saudi Arabia. Any increase in oil prices will adversely impact inflation and the value of the Indian rupee.

However, officials in India said that the US decision to reinstate financial sanctions on Iran will not impact India’s oil imports from the Islamic Republic as long as European countries do not follow suit.

India pays Iran in Euros using European banking channels and unless these are blocked, imports will continue, they said. India and Iran are already exploring the possibility of trading in their own currencies to bypass any trade sanctions.

In a carefully crafted statement, India while on one side said the Iranian nuclear issue should be resolved peacefully through dialogue and by respecting Iran’s right to peaceful uses of nuclear energy, it also made it clear that international community’s strong interest in the exclusively peaceful nature of Iran’s nuclear programme is equally important.

“India has always maintained that the Iranian nuclear issue should be resolved peacefully through dialogue and diplomacy by respecting Iran’s right to peaceful uses of nuclear energy as also the international community’s strong interest in the exclusively peaceful nature of Iran’s nuclear program. All parties should engage constructively to address and resolve issues that have arises with respect to the JCPOA,” the Ministry of External Affairs said in a statement.

India has strategic interests in Iran - both in terms of investment and security. India recently got control of operations of strategic Chabahar port in Iran, and huge investments are being planned in the Free Trade Zone near it. Iran has also become third largest supplier of crude oil to India after Iraq and Saudi Arabia. Besides, ONGC Videsh will be getting into oil exploration at Farzad B oil fields. In addition to this Iran has strategic importance with regard to regional security and an important partner for India to reach out Afghanistan directly.

Shortly after Trump announced US was withdrawing from the JCPOA, Iran’s supreme leader Ayatollah Ali Khamenei threatened that Tehran would pull out of the nuclear deal unless the European signatories of JCPOA (Germany, France, United Kingdom) guaranteed that trade relations would continue despite the US withdrawal. While both Germany and UK expressed displeasure over Trump’s decision to quit the deal that was negotiation by former US President Barack Obama in 2015 to rein in Iran’s nuclear ambitions, France promptly assured Iran that the JCPOA is not entirely dead despite US pulling out of it.

Under the JCPoA Iran is expected to significantly cut down its stores of centrifuges, enriched uranium and heavy-water - the key components for nuclear weapons.

India, a country that has faced sanctions following its nuclear tests in 1998, in principal does not support economic sanctions on such issues. At the same time, India has expressed its deep commitment to non proliferation of nuclear weapons and supported use of nuclear power only for civil and peaceful purpose.

India and Iran share a warm relationship that got better after the 2015 JCPOA making it easy for New Delhi to have business relations with Tehran. During the visit of Iranian President Hassan Rouhani this February, India and Iran signed nine agreements on various spheres, including a lease contract of 18 months for the operation of Shahid Beheshti Port of Chabahar. Besides, pacts on health and medicines, agriculture and trade promotion were also signed.

The two sides also decided to put in place an effective banking channel for business transactions. In this context, the possibility trading through Rupee-Rial arrangement is also being worked out. The decision to allow Iranian Pasargadbank to open a branch in India is under advance consideration.

Courtesy: The Pioneer, Thursday, 10 May 2018 | Vineeta Pandey | New Delhi