NEW DELHI: US’ decision to end the Iran oil sanctions waiver will not affect India’s investments in Chahbahar port in Iran. The revocation of the “significant reductions exemption” (SRE) which allowed eight countries, including India, to continue to source Iranian oil for the past six months ends on May 2, following which the US expects oil imports from Iran to go down to zero.
While India may have been insulated on the Chahbahar front, its current plan on using a rupee payment account for Iran’s oil may be in danger. India has been paying for a large percentage of its oil imports through a rupee mechanism that is deposited in an escrow account in an Indian bank. Iran uses that money to buy essential items like foodstuff, medicines etc from India. After May 2, US has told India it would not allow India to add to the corpus, although Iran would be able to continue to use whatever is left in the account. Indian officials say there is little “clarity” on the matter.
