Despite US sanctions on trade with Iran, imports continue, Iranian Foreign Minister Javad Zarif said on Tuesday at the India-Iran Business Forum organised by CII in New Delhi. He said Indian farmers have to pay nearly 38 per cent for Iranian fertilisers due to "arbitrary sanctions".

"Iran is a small part of the Indian economy. We provide urea fertilisers, almost a third of India's requirement. Today they pay 38 per cent more because of the arbitrary US sanctions on Iran from selling them to India, but we still are selling them to India although intermediaries are making a lot of profit. Your farmers are paying 38 per cent more because of the arbitrary sanctions", he said.

India and Iran are looking for alternative payments mechanisms to continue doing business with each other without facing the consequences of US sanctions.

Earlier, the Iranian foreign minister met India's Transport Minister Nitin Gadkari, who termed the meeting on the issue of the Chabahar Port as "fruitful". He later told reporters that India has allowed Iran's Bank Pasargad to open a branch in Mumbai.

Gadkari said, "The government of India has already given permission to Iran to open a bank branch in Mumbai. They are going to open a branch in Mumbai in three months. That will be used for transactions".

The Chabahar port in the Sistan-Balochistan province in the energy-rich nation's southern coast is easily accessible from India's western coast and is increasingly seen as a counter to Pakistan's Gwadar port located at distance of around 80 km from Chabahar.

Sources say Chabahar is an important project for Iran, India and the region. It is an alternative route to Afghanistan. Therefore, it is not just an economic project, it is a security project.

Calling the sanctions "illegal", the Iranian minister said, "These challenges are not of our making, they are imposed from outside. And those challenges are purely illegal...Today we are witnessing economic might is being used to advance illegality, not legality. There is Security Council resolution 2231, adopted unanimously by the UNSC, which calls on all members to take every action in order to advance the implementation of that resolution and to refrain from taking any action that would undermine the resolution."

Iran has been trying to reach out to the international community on the illegality of the sanctions and is hoping that the Europeans would be able to stave off the pressures from the US. A source said, "The US is overexerting itself everywhere. Cannot recall one instance of the UNSC punishing a country for upholding its resolution. The Europeans have found out that they could establish a special purpose mechanism to deal with Iran. Europe +China + India is bigger than the US, but they still have accepted what Washington says or wants. US global power is a bubble. Bubbles burst when you pump too much air in them. And I think the US is pumping way too much bubble."