NEW DELHI: US president Donald Trump’s decision to reinstate sanctions on Iran will not have much impact on India’s trade relations with Iran, Commerce Secretary Rita Teotia said on Wednesday.
“The sanctions were in place for so many years. There was a partial lifting by the Obama administration and that did not see a surge of exports from India. Our trade with Iran has remained at even levels. I do not expect any significant shift or sudden shutdown in trade with Iran,” Teotia said.
When asked if the two countries will go back to the earlier banking arrangement for buying natural gas and oil, Teotia said the Rupee-Riyal arrangement was never terminated. “The Rupee-Riyal arrangement that existed is in existence,” she said.
Iran, one of the major exporters of oil and natural gas to India and global markets will have a tough time in exporting its natural resources at a time when demand for the fossil fuel is the highest in Asian countries amid a cut down in supply by other oil producing nations.
Experts says even though exports from India might grow post the new sanction, what will impact India is the upward movement in international crude prices in the coming days, as the sanctions raise concerns that the global supply of oil will be squeezed.
Post the announcement of Trump’s withdrawal from the Iran nuclear deal, the price of Brent Crude on Wednesday was up by almost three per cent at $76.75 per barrel, highest level since November 2014.
A leading official of a state-owned refinery said that there will some impact on India’s oil demand and consumption because of the sanctions, but it won’t be very high. It has to be noted that India’s import of oil from Iran has declined in recent times.