India-Iran Relations at the Zenith Thanks to US Sanctions, EU Sluggishness

Iran is working with its close allies like India, China and Russia to bypass US sanctions and lethargic EU approach. This was stated by Foreign Minister Mohammad Javad Zarif in New Delhi. Recently, India got full operational control of the strategic Chabahar Port in Iran which gives New Delhi direct access to land-locked Afghanistan.

Zarif told reporters in New Delhi on Tuesday that the EU is moving more slowly than expected to facilitate non-dollar trade with Tehran through a mechanism called the special purpose vehicle (SPV).

“We continue to work with the Europeans for the special purpose vehicle but we are not waiting for them,” said Zarif who arrived in New Delhi for a three-day visit. “We are working with our traditional partners like India, like China, like Russia so that we continue to work in the interest of our people,” he added.

So far, the Europeans have defaulted on two dates which they had announced to bring the SPV into operation. The vehicle purportedly aims to ensure economic benefits for Iran from staying in a 2015 nuclear deal after President Donald Trump recanted it in May.

On Saturday, Foreign Ministry spokesman Bahram Qassemi said Iran “holds Europe definitely responsible for failing to implement the financial mechanism,” warning that the bloc should account for the “consequences” of the delay.

Qassemi said the European Union, not least the three European parties to the deal with Iran – Germany, France and Britain –, “are captive and hostage to the American economy.”

As such, Tehran has not been sitting on its hands. On Sunday, Iran’s Deputy Minister of Petroleum Amir Hossein Zamaninia said the country had found new customers for its oil.

“Despite US pressures on the Iranian oil market, the number of potential buyers of Iranian oil has significantly increased due to a competitive market, greed and pursuit of more profit,” he told Ministry of Petroleum’s Shana news agency.

Iran’s major oil clients continue to take shipments under a 180-day grace period given by the Trump administration to reduce liftings and find new suppliers. As Iran’s second oil buyer, India is one of the countries given waivers by the US to continue Iranian oil imports.

Indian Resumes Iran Oil Imports 

On Monday, Indian industry sources said state-run Bharat Petroleum Corp and Hindustan Petroleum Corp will import 1 million barrels each of Iranian oil in February after a gap of three months, taking the nation’s overall purchases from Tehran to 9 million barrels.

Top refiner Indian Oil Corp will lift 5 million barrels, while Mangalore Petrochemicals Ltd will buy 2 million barrels, Reuters quoted the sources as saying.

Earlier this month, New Delhi exempted rupee payments by Indian Oil Corp to Iran for crude oil imports from steep taxes. “Iran has been and will be a reliable source of oil supply to India,” Zarif said on Monday as he arrived in New Delhi to take part in an annual research forum attended by economists and entrepreneurs.

Zarif said he decided to use the opportunity to bring with him “a big economic delegation” that comprised representatives from the private sector and state political and economic officials who would hold talks with their Indian counterparts.

Iran and India, the minister said, have maintained their good relations after the US reimposed sanctions on the Islamic Republic. He cited “a good banking agreement with India which was signed following the sanctions, through which imports and exports , as well as other financial needs,will be handled.”

Bank Pasargad to open a branch in Mumbai

India’s Union Minister Nitin Gadkari said after a meeting with Zarif Tuesday that Iran’s Bank Pasargad will open a branch in Mumbai within the next three months to process transactions between the two countries.

The Iranian oil money is currently being kept in India’s government-owned UCO Bank in the Indian currency, which has led to a debt buildup because of the US sanctions. The income deposited in an Indian bank is subject to a withholding tax of 40 percent plus other levies, further complicating oil purchases from Iran by India’s refiners.

Early this month, the Indian government intervened and exempted rupee payments to Iran from the steep tax.   Zarif said there were numerous areas of cooperation for boosting ties, one of which is Iran’s strategic port of Chabahar. “Indians are keen on the presence in Chabahar and Iran’s transit infrastructures,” he said.

Gadkari said India is hopeful to fully operationalize Chabahar, with the Bank Pasargad branch in Mumbai intended for related transactions.

The minister termed his meeting with Zarif on Chabahar “very fruitful,” saying they had held detailed discussions and resolved a lot of issues.

“Chabahar Port is very important for us. We are working very hard on it… Some problems were there, but the Iranian government and their minister… are also in the process to resolve all the issues as early as possible. I am confident that we will be in a position to start full function of Chabahar Port at the earliest,” he said.

Chabahar Port

Chabahar on the coast of the Gulf of Oman is Iran’s southernmost city. The port is easily accessible from India’s west coast and New Delhi hopes to utilize its transit potentials to embolden the country’s connectivity footprints.

Gadkari said India has placed $85 million machinery order for Chabahar and the first ship from Brazil has already been received at the port.

India took over the operations of the first phase of Shahid Beheshti Port in Chabahar in December 2018. Commercial operations began the same month with the arrival of a Cyprus-registered bulk carrier with 72,458 tonnes of corn cargo.

Gadkari said the financial arrangement for Chabahar is also ready and proposals on the barter system between the two nations can also be considered. India, he said, can provide steel rails and locomotive engines to Iran and the Islamic Republic can provide urea to India.

Zarif also said he was talking to Indian officials about selling more urea to India at a “reasonable” rate. “We are very happy that both UCO Bank from India and Pasargad Bank from Iran are getting started with the business,” the Iranian minister said, adding the two banks will facilitate transactions relating to the operation of berths at Chabahar Port.

More News at EurAsian Times

Originally Published by PressTV