The finance ministry and the RBI will work out a mechanism to ensure that India and Iran trade does not get disrupted following the decision of the US to impose sanctions on the import of Iranian crude oil, a top government official said Tuesday.
Commerce Secretary Anup Wadhawan said they are telling exporters that proper mechanisms will be put in place to ensure that the trade does not get disturbed with Iran.
In May, the Trump administration had pulled out of the Iran nuclear deal and brought back economic sanctions against Tehran.
The US has told India and other countries to cut oil imports from the Gulf nation to "zero" by November 4 or face sanctions. India is yet to take a call on complying with the US sanctions on Iran.
"We are certainly urging the departments concerned to put in place an arrangement, as and when required, which ensure that there is no disruption (in trade)," Wadhawan told reporters here.
He added that "ministry of finance and the RBI will work out various mechanisms to ensure that trade does not get disturbed. Those mechanisms will be worked out".
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Iran was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11 but western sanctions over its suspected nuclear programme relegated it to the 7th spot in subsequent years. In 2013-14 and 2014-15, India bought 11 million tonnes and 10.95 million tonnes respectively from the country.
Sourcing from Iran increased to 12.7 million tonnes in 2015-16, giving it the sixth spot. In the following year, Iranian supplies jumped to 27.2 million tonnes to catapult it to the third spot.
Replying on a question whether India is exploring the possibility of Rupee-Ruble trade with Russia, he said: "We have a history with Russians of Rupee-Ruble trade ... so certainly all those options will be discussed and will be explored".
He added that trade in local currencies helps in promoting balance trade, wherever India is a large importer of goods such as petroleum, gold or diamond.
Talking about India-US trade issues, the secretary expressed hope that both the countries would soon find a solution on all the matters.
"We are always hopeful that we will resolve issues. I am sure, we will find a solution," he said adding US trade officials are already in the national capital for discussions.
Recently, the government, for the second time, extended the deadline for the imposition of higher customs duties on 29 products, including almond, walnut and pulses, imported from the US, till November 2.
The duty hike move by India was in retaliation to US President Donald Trump's March 9 decision to impose heavy tariffs on imported steel and aluminium items.
India is pressing for exemption from high duties imposed by the US on certain steel and aluminium products, resumption of export benefits to certain domestic products under their generalised system of preferences (GSP), greater market access for its products from sectors, including agriculture, automobile, auto components and engineering.
As many as 3,500 Indian products from sectors such as chemicals and engineering get duty-free access to the US market under the GSP, introduced in 1976.
On the other hand, the US is demanding greater market access for its farm and manufacturing products, including medical devices.
India's exports to the US in 2017-18 stood at USD 47.9 billion, while imports were USD 26.7 billion. The trade balance is in favour of India.
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