India and Iran seek closer trade ties | SupportBiz

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India and Iran seek closer trade ties

Amid mounting Western pressure, India has underlined that unilateral sanctions should not impact upon its 'legitimate trade interests' with Iran, as Tehran urged New Delhi to hike its crude oil purchases. Barely a month before the US and EU sanctions against Tehran become operational, India described Iran as 'a key country' for its energy needs.

External Affairs Minister SM Krishna held talks with his Iranian counterpart Ali Akbar Salehi on a wide gamut of issues that included Iran's controversial nuclear programme, bilateral economic ties, energy cooperation and terrorism.

Salehi is in India as Special Envoy of Iranian President Mahmoud Ahmedinijad, to extend an invitation to Prime Minister Manmohan Singh to attend the 16th Non-Aligned Movement (NAM) Summit to be held in Tehran in August.

Responding to a question on the proposed Western sanctions, Krishna stressed that India has always abided by the resolutions of the United Nations Security Council on the Iran issue, but indicated New Delhi's unease with unilateral sanctions.

"As far as other sanctions are concerned, those decided unilaterally or regionally, we are aware of such measures. In a globalised world, these actions can have an impact on the markets," Krishna said at a joint press conference with Salehi.

"Our commercial entities take these into account. Such measures should not impact on legitimate trade interests," he added.

As the two countries look to bypass sanctions by using the Indian rupee to settle part of their payments, Krishna said Iran is 'an important neighbour and crucial trade partner for India and also a major source of our energy supplies'.

"It is also a gateway for India to Central Asia. India and Iran share an interest in the stability of Central Asia and the Gulf. We also face threats from terrorism and extremism," he stated.

Pitching for greater economic and energy ties with India, the Iranian foreign minister said that Iran's total trade with India is now worth USD16 billion.

"Iran is a reliable energy source for India, which has growing energy needs," he stated.

"However, this is not proportionate to the potential of these two countries. We are hoping and looking into ways of raising this bilateral trade between India and Iran," he said in remarks that are bound to upset Washington and its allies.

"India should look for resources that are reliable. Iran will remain a reliable partner for India," said Salehi.

India currently imports around 10-11 per cent of its oil requirements from Iran, and has marginally reduced its imports as it seeks to diversify its energy sources. US Secretary of State Hillary Clinton is understood to have taken up the issue of Iranian oil imports with Krishna during her visit to New Delhi on May 8. The issue is expected to figure in discussions again when Krishna goes to Washington for the India-US strategic dialogue on June 12.

The US sanctions against Iran's central bank are scheduled to take effect on June 28, and the European Union's oil embargo is due on July 1.

Lauding India's commitment to non-alignment, Salehi said that he will hand over the invite for the NAM summit when he meets Manmohan Singh on June 1.

Salehi also updated Krishna on the recent discussions between Iran and the P5+1 in Baghdad on Tehran's nuclear programme. India reiterated that the Iranian issue should be resolved through diplomacy.

"India has always held that the nuclear issue should be resolved through diplomacy, and the framework of the IAEA provides the best forum to address the technical aspects of the issue," Krishna said.