As the D day of Iran sanctions from the United States approaches, US President Donald Trump broadly grant India the waiver from Iran sanctions.
It is very difficult to understand on what ground Trump agreed to waive India from Iran sanctions because India is yet to decide whether to impose tariffs on American almonds, apples, walnuts and processed metal product in retaliation for the Trump administration’s decision of March to impose tariffs on steel and aluminum imports.
“The sanctions threat and the tariffs are in many ways linked.” –SreeramChaulia, dean of the school of international affairs at O. P. Jindal Global University outside New Delhi
Three times this year when Trump brought up the American trade relationship with India, he complained about the import duties — currently 50 percent — that India levies on Harleys and other foreign-made motorcycles.
India is the second biggest importer of oil from Iran, behind China had imported about 22 million tonnes of crude oil from Iran in 2017-18 and planned to raise that to about 30 million tonnes in 2018-19.
But, as a condition of waiver, Indian oil firms will reduce their imports significantly. Indian companies can import 1.25 million tonnes a month up to March 2019, the same as they ordered for October and November. State oil firms are yet to decide on how this amount will be split between them. A waiver will come as a big relief to Indian Oil and MRPL, the two largest Iranian oil consumers.
How the oil firms will pay to Tehran is yet to be discussed but it is likely to be that 55% of the amount will be paid in Euro and 45% in Rupee, this Rupee will sit idle till the sanction is on and rest quantum will be used to import rice and drugs from India.