New Delhi: India aims to engage with the US on its proposed new sanctions on Iran over its nuclear and missile programme with an American delegation expected to visit Asia’s third-largest but fuel import-dependent economy later this month.

Any decision to cut fuel imports from Iran will be based on national interest, two people familiar with the development said. India’s energy security, ties with Iran that India views as a gateway to landlocked Afghanistan and Central Asia and New Delhi’s relations with Washington are factors that will be considered as New Delhi formulates a strategy in this regards, two people familiar with the developments said separately.

“We expect, as a major importer of energy from Iran, to be similarly engaged," said one of the two people cited above.

Iran is India’s third-largest oil supplier after Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil between April 2017 and January 2018.

India was eyeing a visit from such a team given the statement by Brian Hook, director of policy planning in the US state department, on Tuesday that teams from the US state and commerce departments would engage with countries on the sanctions targeting Iran, according to the person quoted above.

“I think there is no doubt that the US is going to put pressure not just on us. However, the question is what do we see as our national interest, how do we respond to it and how do we explain our case to the US," the person said.

US President Donald Trump announced in May that the US was pulling out of the 2015 Iran nuclear deal and that Tehran would come under a new set of sanctions because of its nuclear and missile programmes and its alleged involvement in the civil war in Syria.

The US has also warned India and other countries importing oil from Iran to cut imports to “zero" by 4 November, making it clear that there would be no waivers for anyone.

The first set of US sanctions on Iran will kick in on 6 August and the second set on 4 November. However, the US was prepared to work with countries that are reducing their oil imports on a case-to-case basis, the second person quoted above said.

India plans to import 30 million tonnes of crude from Iran this year, the person said adding that New Delhi would have to scout for alternate sources that would make fuel available at affordable prices.

Meanwhile, India is also looking at the possibility of falling back on the rupee-rial arrangement it had worked out some years ago to circumvent banking sanctions for importing oil from Iran.

The rupee-rial that arrangement was used to buy oil from Iran before sanctions were lifted against it three years ago. Under the mechanism, India used to pay in euros to clear 55% of its dues through Ankara-based Halk bank. The remaining 45% of the payment was remitted in rupees in accounts Iranian oil companies had with UCO Bank.

India is also expected to convey to the US the importance of Iran’s Chabahar port project that New Delhi sees as key to trade with Afghanistan.

According to the second person cited above, there have been “informal" indications from the US that the Chabahar port may be kept out of the sanctions regime given that shipping to Iran and ports in the country are also coming under the US sanctions.

“They understand our reasoning on Chabahar. It (the US sanctions) should be carved out in the context of Afghanistan," said the second person.

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