The Indian Express– CRS in its latest report, said that India began reducing economic relations with Iran in 2010 when India’s central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.
India cooperated with multilateral efforts to use United Nations-mandated sanctions to achieve a nuclear agreement with Iran, a bipartisan Congressional report has said as the Trump Administration gears up to muster international support against Tehran. The independent Congressional Research Service (CRS), in its latest report, said that India began reducing economic relations with Iran in 2010 when India’s central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran. “India implemented UN-mandated sanctions against Iran and generally cooperated with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran,” the report which was presented to lawmakers on Monday said.
CRS is the independent research wing of the US Congress which prepares periodic reports on issues of interest for
lawmakers for them to make informed decisions. These reports, however, are not considered as official reports of the US Congress.
In its 42-page report, CRS notes that during 2010-2016 India’s private sector described Iran as a “controversial
market”, a term used by many international firms to describe markets that entail reputational and financial risks.
In January 2012, Iran agreed to accept India’s local currency rupee to settle 45 per cent of its oil sales to India, which Iran mostly used to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts and other
products. “India reduced its imports of Iranian oil substantially after 2011 — by the time of the Joint Plan of Action (JPA), Iran was only supplying about six per cent of India’s oil imports, down from over 16 per cent in 2008. India incurred significant costs to retrofit refineries that were handling Iranian crude. However, since the Joint Comprehensive Plan of Action (JCPOA), oil imports have apparently increased to close to 2011 levels,” the report states.
Indian firms ended or slowed work on investments in Iranian oil and gas fields, work that is likely to resume now
that sanctions have been lifted, CRS said. It added that India and Iran are considering using Turkey’s Halkbank to transfer to Iran $6.5 billion for oil purchased by India during 2012-2016.
In 2015, India and Iran agreed that India would help develop Iran’s Chahbahar port that would enable it to trade
with Afghanistan unimpeded by Pakistan. “With sanctions on Iran now lifted, that project no longer entails risk to Indian firms involved. In May 2016, Prime Minister Narendra Modi visited Iran and signed an agreement to invest $500 million to develop the port and related infrastructure,” CRS said. The report also said one test of Pakistan’s compliance with sanctions was a pipeline project that would carry Iranian gas to Pakistan – a project that US officials on several occasions stated would be subject to sanctions under the Iran Sanctions Act. “Despite that threat, agreement on the $7 billion project was finalised on June 12, 2010, and construction was formally inaugurated in a ceremony attended by the Presidents of both countries on March 11, 2013,” it said.