India is the second largest buyer of Iranian crude after China. Iraq overtook Saudi Arabia as India's largest supplier of crude oil by volume in December 2017 on account of discounted sales.
US Ambassador to the United Nations, Nikki Haley told Prime Minister Narendra Modi on Wednesday that it was important to cut dependence on Iranian oil and said the US would work to allow India to use an Iranian port as corridor to Afghanistan.
USA told countries to cut all imports of Iranian oil from November 4 and is unlikely to offer any exemptions, a senior State Department official said on Tuesday as the Trump administration ramps up pressure on allies to cut off funding to Iran.
India is the second largest buyer of Iranian crude after China. Iraq overtook Saudi Arabia as India's largest supplier of crude oil by volume in December 2017 on account of discounted sales.
According to the External Affairs Ministry, India-Iran bilateral trade during the 2016-17 fiscal was USD 12.89 billion. India imported USD 10.5 billion worth of goods, mainly crude oil, and exported commodities worth USD 2.4 billion.
Iran for crude oil imports to India accounted $1.1 billion in the previous fiscal. Iran currently accounts for 16.91 percent of India's total crude oil imports by volume.
Last time when sanctions were imposed on Iran, India had devised a system to buy oil by partially bartering goods and remitting payment in rupees via UCO bank and other banks, who don't have any business in the West.
Besides crude, India has other interests, chief among them the construction of the Chabahar port in the Gulf of Oman. The port is of strategic importance to India, which wants to use it as part of a new maritime route that bypasses Pakistan.
After the nuclear agreement, with Obama administration now rescinded by the President Trump, Indian refineries were making payment through State Bank of India and Germany-based bank Europaeisch-Iranische Handelsbank AG (EIH). SBI has now refiners that it wouldn't support payment once the sanctions come in to effect.
Iran used to offer a 60-day credit period on oil sales, which means payment for cargoes loaded from end-August will be due in November.
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