India will keep trading with Iran and Venezuela despite the threat of penalties for violating U.S. sanctions recently announced against the two countries, Foreign Minister Sushma Swaraj has said.
India is currently a top destination for Iran's oil exports. Asked about the U.S. move to withdraw from the Iranian nuclear deal and reimpose sanctions at a news conference on May 28, Swaraj said that India's policy was to honor only UN sanctions, not sanctions imposed by individual countries.
Swaraj's comments came before a meeting with her Iranian counterpart, Mohammad Javad Zarif, in New Delhi at which they discussed strategy in the aftermath of the U.S. decision.
An Indian government statement afterward said Zarif briefed Swaraj about his discussions with European, Russian, and Chinese leaders about preserving the Iran deal without the United States.
India continued to trade with Iran during previous rounds of U.S. sanctions, but after UN sanctions were imposed in 2006, it had to cut Iranian oil imports because they choked off its banking channels and insurance coverage for oil tankers.
While European countries have continued to grant Iran the sanctions relief promised under the 2015 nuclear deal in exchange for curbs on Tehran's nuclear activities, the United States is moving to reimpose tough sanctions on Tehran and has warned that foreign companies that deal with Iran could themselves be punished under the measures.
Major European companies, including Total and Allianz, already have announced they will withdraw from Iran unless the United States grants them waivers from the sanctions.
But Swaraj said New Delhi will not be dictated to by other countries.
"We don't make our foreign policy under pressure from other countries," she said, adding that New Delhi only honors sanctions imposed collectively by members of the United Nations.
"We believe in UN sanctions, but not in country-specific sanctions," she said.
Bilateral trade between India and Iran amounted to $12.9 billion in 2016-17. India imported $10.5 billion worth of goods, mainly crude oil, and exported commodities worth $2.4 billion.
India has other interests in Iran, in particular a commitment to build the port of Chabahar on the Gulf of Oman.
The port is being touted as a way for India to establish trade routes that bypass rival Pakistan.
Media reports have speculated that India could revive a rupee-rial payment arrangement with Iran to shield exporters from the reach of U.S. sanctions, which prohibit using the U.S. dollar or U.S. financial system in business transactions with Iran.
Washington has also tightened sanctions recently against Venezuela over the controversial reelection of President Nicolas Maduro.
Swaraj said India would continue trading with Venezuela, but there was no plan to use a cryptocurrency Caracas recently created to pay for oil.
"We cannot have any trade in cryptocurrency, as it is banned by the Reserve Bank of India. We will see which medium we can use for trade," she said.