Visiting Foreign Minister Javad Zarif hints at special financial system to augment trade

India will take a call on purchase of Iranian energy after the general election, External Affairs Minister Sushma Swaraj told her Iranian counterpart Javad Zarif in New Delhi on Tuesday.

The discussions come in the backdrop of escalating tensions in the Gulf after the U.S. waivers for supply of Iranian energy ended on May 2, prompting Tehran to declare that it would no longer be bound by the 2015 nuclear deal.

“On purchase of oil from Iran, External Affairs Minister reiterated the position that a decision will be taken after the elections keeping in mind our commercial considerations, energy security and economic interests,” said a source familiar with the discussion held between the two sides at the Jawaharlal Nehru Bhavan.

Rising tensions

The Indian side said the visit of the Iranian Minister was undertaken “at his own initiative” to update about the developments in the Gulf region where tension escalated over the weekend as incidents of sabotage were reported in Saudi Arabia. Tehran, meanwhile, indicated that it would leave the Joint Comprehensive Plan of Action (JCPOA) that was agreed upon during the second tenure of U.S. President Barack Obama.

After Tuesday’s meeting, Mr. Zarif described the talks he held in India and Turkmenistan as “excellent”.

“Those who actually live in our fragile neighbourhood have a real national security interest in promoting peace, stability, cooperation and connectivity. Iran remains a most accessible, sustainable and secure partner,” he said in a social media message after meeting Ms. Swaraj.

Mr Zarif had blamed the U.S. for the current tensions in the Gulf. “Unfortunately, the United States is escalating the situation in the region. We do not seek escalation, but we have always defended ourselves” Mr Zarif told reporters.

Indicating continued energy trade, Mr. Zarif said Tehran and New Delhi have devised plans to ensure supply. “The two sides have designed a special financial system to augment trade and economic cooperation,” he said. However, India has not announced any such plans as yet.

The visiting minister also informed India that as per the announcement of President Hassan Rouhani, Iran has given a 60-day time-line to the EU-3 and other parties to the nuclear deal for restoring oil and banking channels. As part of the JCPOA (Joint Comprehensive Plan of Action), Iran was required to sell its surplus enriched uranium abroad, rather than store it inside the country. Mr. Rouhani had declared on May 8 that Iran would not keep this part of the promise after U.S. withdrew from the deal.

Ms. Swaraj conveyed India’s position on the critical nuclear deal that restored banking and trade rights to Tehran after decades, and urged the stakeholders to resolve differences peacefully.

“India would like all parties to the agreement to continue to fulfill their commitments and all parties should engage constructively and resolve all issues peacefully and through dialogue,” the source said.

India and Iran also “expressed satisfaction” at the operationalisation of the interim contract between India Ports Global Limited (IPGL) and Ports and Maritime Organisation (PMO). The official source mentioned that both the foreign ministers also discussed the current situation in Afghanistan where violence has erupted with the beginning of the holy month of Ramzan despite the US-led talks with a Taliban delegation in Doha.