An Iranian trade delegation to India sealed deals to buy shipments of rice, sugar and soybeans from the South Asian country as part of a plan for Tehran to increase trade with India to get around US financial sanctions on its oil shipments.
India has been unable to pay in full for Iranian oil imports because of tightening US sanctions that have made it difficult to get access to US dollars for transactions with Iran.
Instead, Iran has agreed to accept payment in Indian rupees and sent a trade delegation to India this week to look for goods to buy with the money it earns.
The US is threatening targeted transactions against financial institutions of countries that fail to significantly reduce oil imports from Iran before a June 28 deadline.
US Secretary of State Hillary Clinton, on a visit to India this week, praised New Delhi for cutting back on purchases from Iran in recent months but urged the country to make further reductions. A senior US State Department official will travel to India next week to assess the country’s ability to shift more oil purchases to countries such as Iraq and Saudi Arabia.
While reducing purchases, Indian officials say the country — which relies on imports for three-quarters of its crude requirements — needs to continue to buy from Iran to meet growing local demand for oil.
The Iranian trade delegation, whose visit coincided with Clinton’s trip to India this week, shows the delicate balance New Delhi is trying to maintain between toeing Washington’s line and continuing to buy oil from Iran.
“We don’t have anything to do with the visit of Hillary Clinton,” said Yahya al Eshagh, president of the Tehran Chamber of Commerce, Industry and Mines. “We are very happy that we are doing our own business.”
In February, Iran agreed to accept payment in Indian rupees for up to 45 percent of its oil exports to India, and the countries have set up a credit window between Indian and Iranian state-owned banks.
Eshagh did not disclose the size of the latest trade deals but said both nations were looking to step up annual trade to $24 billion in the medium term from $14 billion now.
