New Delhi (Sputnik): India and Iran should move to a barter system to trade for Iranian crude amid the revocation of the US sanctions waiver, as it would be a "win-win" situation for all, according to Indian financial and market expert Kunal Saraogi.
The recent meeting of Indian and Iranian ministers came amid rising tensions in the Gulf after the US withdrew sanctions waivers to eight countries, including India, for importing Iranian crude on 2 May.
Speaking of the alternatives for India following the withdrawal of the sanctions waiver, Saraogi said: "The withdrawal of waivers has been a significant loss for India. India depends heavily on Iran for its oil imports and Iran over the years has been [a] generous trade partner for India. If we go along with the US sanctions it would affect our position quite seriously, as 10.9% of India's crude oil demand for the year 2018-19 were met by Iran. So it is high time that we started thinking of the alternatives".
Asked about the significance of the recent visit of Iranian Foreign Minister Zarif, he said: "[The] Iranian foreign minister visiting India is definitely a positive move and India can now envisage a plan for a 'barter system' trade of Indian goods in exchange of crude oil from Iran".
"When we discuss the present scenario, we need to understand that the sanctions by the US do not mean sanctions by the United Nations. India is under no obligation to go along with it. But still, if India decides to respect the US sanctions, then barter system would be a nice and innovative way going forward which makes sure that it is a win-win situation for all the stakeholders", he added.
Saraogi, however, was quick to warn that India, in the process of dealing with Iran, should not invite the wrath of the US. "Looking to make a retaliatory statement towards the US against the withdrawal of GSP may invite a more aggressive approach from the US, which would certainly not be beneficial for the Indian economy. The GSP withdrawal is a completely different issue from the Iran oil crisis. We should rather aim for back channel diplomacy with the US. They have understood our problems in the past and issued a sanctions waiver. Proper talks through concerned channels may again lead to some positive outcome", he added.
India over the years has received tangible benefits from importing oil from Iran, which happens to be the third largest source of oil imports for India, after Iraq and Saudi Arabia. Iran provides free shipping of oil, insurance, freight and longer credit periods.
The views and opinions expressed in this article are solely those of the speaker and do not necessarily reflect Sputnik's position.