The world’s fourth-largest oil consumer, India which imports 12% of New Delhi’s oil demand (110 million tonnes of crude per year) from Iran, is unlikely to scale down its petroleum imports from Tehran despite US and European sanctions against the Iran. Though some other countries like, Saudi Arabia, Nigeria, the other Gulf countries contributed to the supply, Iran was the second largest supplier, and it would be difficult to find replacement of this scale.
Finance Minister, Pranab Mukherjee said, ‘it is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them.’
India is the world’s fourth-largest oil consumer of the world and is Iran’s second-biggest oil client after China. China too has refused to stop its oil imports from Iran. Buying of Iranian oil without being seen as breaker of UN sanctions will be a tricky issue for India. The RBI has said that it plans to pay Tehran in Rupees but has refused to comment any further as it was a bilateral issue. However, it hopes that India can continue its imports from Iran in the long run.
The US and other Western countries had imposed sanctions on Iran's economy over its controversial nuclear programme. US President Barack Obama added to those measures on December 31, last year when he signed into law additional sanctions targeting Iran's central bank and financial sector. Consequently, Iran's supplies to India have been fraught with payment problems for the past 13 months after a clearing mechanism was scrapped in December 2010 and refiners have sought alternative supplies.
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