India seeks to bolster ties with Iran despite oil sanctions woes

Officially, India's foreign secretary traveled to Iran to talk about a range of bilateral and international issues. But there's little doubt that behind closed doors the talks centered on how the two nations can stay cosy, even as international sanctions make it ever more difficult for India to make payments for its oil imports.

India and Iran today discussed key bilateral, regional and international issues including combating global terrorism and energy security apart from operationalising an agreement on transfer of sentenced prisoners, according to the Press Trust of India

However, the top of mind question for policy wonks is can India pay the debts it owes to Iran for past purchases of crude oil, and can the lucrative trade continue amid sanctions on Iran for its alleged efforts to develop nuclear weapons, reports India's Daily News & Analysis newspaper (a.k.a. DNA).

DNA quotes an unnamed source as saying Iran worked around the sanctions imposed on India before the Iranian revolution and sold oil to New Delhi at preferential terms, so the current regime in Tehran expects at least a bit of payback. 

“Today, India is becoming more pro-West, and Iran more non-aligned. Today, sanctions are off India’s back, but Iran struggles under them. At a time like this, the least one expects of India is to meet its debt obligations,” DNA cites the "knowledgable source" as saying.

India and Iran are not on the brink of severing trade relations, the paper said. But the US pressure on various others -- most recently Germany -- not to convert rupees to dollars or Euros for the purpose of oil purchases for Iran has created a tough situation, with India already owing Iran billions of dollars.