India remains non-committal on restarting purchase of oil from Iran despite US President Donald Trump signalling earlier this week that the country may be relaxing economic sanctions against Teheran.
“Our energy requirements are based on market factors and prevailing global situation,” said MEA spokesperson Randhir Jaiswal at a media briefing on Thursday when asked whether India would buy oil from Iran now that the US seems to have lifted its sanctions.
Trump, who has tried to claim credit for ending the 12-day Israel-Iran war, said that with hostilities ending, China could resume its oil purchase from Iran.
“China can now continue to purchase oil from Iran. Hopefully, they will be purchasing plenty from the US, also. It was my great honor to make this happen,” Trump posted on his social-media platform, Truth Social.
While Trump did not directly say that the US had ended its sanctions against Iran, the social-media post indicated that at least Iran may now be allowed to sell oil without attracting sanctions. New Delhi may be waiting for more clarity on the matter.
Oil waivers
India had to stop purchasing oil from Iran in 2019 after the US ended oil waivers granted to eight countries, including India. Prior to the West’s sanctions against Iran for its alleged nuclear activities, Iran was among the top three suppliers of oil to India.
Iran was a preferred supplier as it used to extend favourable terms, including discounted prices and extended credit periods.
If the US clearly establishes that Iran would be allowed to export oil without the fear of sanctions, it is likely that Iran may extend favourable terms to India like it offered earlier, making transactions economically feasible.
If India decides on re-starting oil purchase from Iran, exports of Indian products, such as rice, tea, spices, fruits, pharmaceuticals and yarn, which declined from over $5 billion in 2013 to about $1.25 billion in FY25, could increase.