The independent Congressional Research Service (CRS) said in its latest report said that India began reducing economic relations with Iran in 2010 when India's central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran.
"India implemented UN-mandated sanctions against Iran and generally cooperated with multilateral efforts to use sanctions to achieve a nuclear agreement with Iran," the report which was presented to lawmakers yesterday.
In its 42-page report CRS notes that during 2010-2016, India's private sector described Iran as a "controversial market" - a term used by many international firms to describe markets that entail reputational and financial risks.
In January 2012, Iran agreed to accept India's local currency rupee to settle 45 per cent of its oil sales to India, which Iran mostly used to buy Indian wheat, pharmaceuticals, rice, sugar, soybeans, auto parts and other products.
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"With sanctions on Iran now lifted, that project no longer entails risk to Indian firms involved. In May 2016, Indian Prime Minister Narendra Modi visited Iran and signed an agreement to invest USD 500 million to develop the port and related infrastructure," CRS said.
The report said one test of Pakistan's compliance with sanctions was a pipeline project that would carry Iranian gas to Pakistan - a project that US officials on several occasions stated would be subject to ISA sanctions.
reportedly completed the pipeline on its side of the border, CRS said.
"China's announcement in April 2015 of a USD 3 billion investment in the project seemed to remove financial hurdles to the line's completion, and the JCPOA removed sanctions impediments to the project," it said.
However, during President Hassan Rouhani's visit to Pakistan in late March 2016, and possibly considering other competing projects, Pakistan still did not commit to complete the line, indicating that Pakistan might be considering alternative gas supply routes, it said.
"In 2009, India dissociated itself from the project, which was initially conceived as bringing Iranian gas to India, over stated concerns about the security of the pipeline, the location at which the gas would be transferred to India, pricing of the gas, and tariffs," CRS said.