Despite US sanctions, India strengthening relations with Iran

India investing in highway, fertilizer plant in Iran

By Raghavendra Verma

NEW DELHI: India refuses to support United States’ efforts in making economic sanctions work against Iran.

Even as Washington DC blocked the banking channels for Tehran, New Delhi has devised an alternative means to conduct mutual trade. Much of the 14 million tons of crude oil imported by India from Iran in the financial year ending March 2013, was paid into a Rupee account maintained in an Indian government-owned UCO Bank.

The two countries are promoting mutual trade delegation to identify items that could be exported to Iran for the utilization of these funds.

To compensate for the absence of any insurance for Iranian oil tankers, Indian insurance companies have also devised new mechanisms. It is clear that India weighs its energy security far higher than United States’ concern to halt Iran’s nuclear program.

In fact, India’s relationship with Iran holds much more strategic significance. New Delhi is committed to invest up to $100 million in upgrading Iran’s Chabahar port, through which it is trying to create a land route to Afghanistan. New Delhi has already invested in a new highway connecting Chabahar to the Afghan border town of Zaranj.

Chabahar port also gains strategic significance due to the Chinese presence at Pakistan’s Gwadar port, which is only 70 km. east of the Iranian port city.

In a latest move, as reported by the Pioneer newspaper, New Delhi has decided to set up a gas-fired urea (fertilizer) manufacturing factory in Chabahar. The modalities of the project are expected to be worked out in the Indian foreign minister Salman Khurshid’s visit to Tehran on May 3rd.

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