Despite talks hitting rock bottom after the US sanctions went live last year, India may still get access to Iran’s Farzad-B gas block as discussions are ongoing, a senior Iranian minister has said.
“Indians have had the opportunity of getting into Farzad-B (gas field) earlier, and they still have it,” Gholam Reza Ansari, deputy minister for Economic Affairs at Iran's Foreign Affairs Ministry, said on Tuesday, hinting that Iran was willing to provide easier terms for India once negotiations progress.
Ansari’s comments come after senior officials from Oil and Natural Gas Corporation Videsh Limited (OVL) — the overseas investment arm of ONGC — said it may reduce its investment outlay, and agreed to Iran taking delivery of all gas already produced in the field.
India had been looking to secure a contract for developing the gas field since 2009 but successive economic sanctions against the Islamic regime have scuttled plans, as have differences over pricing issues as well as the gamut of Indian investments in the projects.
On the other hand, Iran Foreign Minister Mohammad Javad Zarif, who is on a visit to India, came down hard on Trump and batted for the export of more Iranian fertilizers to India, saying that sanctions have hit domestic farmers.
Uncertain oil trade
Back in November, last year, India — the world’s third largest oil importer — had managed to squeeze out a six-month waiver from the United States with regards to sanctions. As a result, New Delhi had been allowed to import only nine million barrels of Iranian crude. “As far as I understand, Indians are trying to extend these waivers and I think, due to the traditional relation between our countries, they will be successful in securing those waivers as well,” Ansari said.
As a result, the US has made the issue a part of its current trade negotiations with New Delhi. “Senior US officials visiting India have suggested that they may be willing to give India a waiver on America’s tariff hikes on aluminium and steel imports, provided India commits to significantly change its sourcing pattern with regards to petroleum,” a senior trade department official said. India is yet to respond to this, he added.
The UPA government had also been able to bypass international sanctions led by the US after deciding to use the euro for paying Iranian producers. But India will not have access to the European currency this time around as leading European Union nations have also supported Trump’s call for sanctions.
Payment mechanism
India is considering Iran crude oil payments in rupee terms, senior government officials confirmed. As of the last financial year, Iran is the third-largest supplier of crude oil to India. The rupee payment mechanism has been suggested as the best possible way to cut India’s dollar exposure as well as shore up the value of the rupee, which has continued to plummet.
While Indian exports of man-made textiles are slowly increasing, Indian companies have been unable to use market access in pharmaceuticals, according to the Federation of Indian Exports Organizations. Official statistics showed Indian exports have reduced by more than 50 per cent over the past three years to $2.37 billion.