NEW DELHI: India's sole means of dollar payment to Iran for oil may be blocked if a new round of US sanctions is put in place. Diplomatic sources said new sanctions currently on the drafting table could be unleashed after the US presidential election in November.
India currently uses Turkey's Halkbank to route dollar payments to Iran. The new set of sanctions being contemplated would close that route. If these sanctions go through, India's options would be constrained and New Delhi would be heavily dependent on a continuation of the waiver that it currently enjoys. The US administration gave India a waiver on the Iran sanctions, but this was only for 180 days. Japan is the only country that has been given an extension of the waiver.
India is also allowed to pay around 45% of the payment in rupees, which New Delhi wants to use to invest in projects in Iran. India has stepped on the gas to develop the port following a huge endorsement by Iran and Afghanistan. Be that as it may, fresh sanctions on Iran would make India's intentions of staying engaged in Iran more difficult.
Reuters quotes US Congressman Robert Menendez as saying he hopes the additional sanctions will become part of an annual defence policy bill that the Senate and House must finalize after the US presidential poll.
Sources also said EU countries might add to their own basket of sanctions against Iran to perhaps put an embargo on the import of natural gas from Tehran. Now, they have only banned import of oil. Platts, the energy analyst think-tank, observed though that besides Greece, there isn't much gas import from Iran. Iran has the world's second highest gas reserve.
This week's crash of the Iranian rial leading to popular protests in Tehran has, ironically, acted as a spur to the next level of sanctions, which sources here say will be much tougher because they would target other sectors of Iranian economy.
But India doesn't agree with the sanctions programme because it believes they only hurt the people, not the regime.
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