Iranian bank to open Mumbai branch
Foreign Minister Javad Zarif said on Tuesday the European Union was moving slower than expected in facilitating non-dollar trade with Iran to circumvent US sanctions, forcing it to explore avenues with other nations.
“We continue to work with the Europeans for the Special Purpose Vehicle (SPV) but we are not waiting for them,” Zarif told reporters in New Delhi as he led a business delegation during a visit to India. “We are working with our traditional partners like India, like China, like Russia so that we continue to work in the interest of our people.”
He said that the EU's delay in implementing a payment mechanism to keep financial transactions flowing with Iran meant that the Islamic Republic would look elsewhere.
"Europeans have made efforts but couldn't... progress up to our expectations. We will expand our cooperation via various channels such as India," Zarif said.
Brussels is working on the system, after the US ditched the 2015 nuclear deal with Teheran earlier this year and reintroduced a raft of sanctions on the country.
The EU hopes its Special Purpose Vehicle announced in September will keep the nuclear deal alive and persuade Tehran to stay on board by giving companies a way of trading with Iran without violating Washington's sanctions.
But Brussels is struggling to find a host for the SPV and many EU companies are fearful of repercussions from US President Donald Trump's administration.
New waiver for India
India, which imports around 80 percent of its oil needs, recently signed a deal with Iran to buy crude in rupees rather than US dollars, helping it get around the sanctions.
In November, the Unites States granted a six-month waiver from sanctions to India and allowed New Delhi to continue to import a limited quantity of Iranian oil.
Deputy Foreign Minister for Economic Diplomacy Gholamreza Ansari said on Tuesday that Iran hopes India will strive to get another waiver from US sanctions to continue buying oil from Tehran.
In the previous round of sanctions India did not halt oil imports from Iran, said Ansari, who is accompanying Zarif in the India trip.
The official said there is also a chance for Indian companies to get development rights for Iran’s Farzad B gas field. Tehran could ease some terms associated with the project, he added.
Bank branch in Mumbai
Indian Transport Minister Nitin Gadkari said New Delhi had allowed an Iranian bank to open a branch in Mumbai.
The government of India has already given permission to Iran to open a bank branch in Mumbai. They are going to open a branch in Mumbai in three months. That will be used for transactions," Gadkari after a meeting with Zarif.
“We had detailed discussions... Our meeting was very fruitful and we have resolved a lot of issues," Gadkari said.
Zarif said that Iran was "very happy" that the Indian government was allowing the Iranian Bank Pasargad to open a branch in India's financial capital.
"With India we are expanding our areas of cooperation through various channels that we have, both through direct channels as well as barter, and providing for requirements of the two countries," the Iranian minister said.
"We hope, despite US sanctions, Iran and India will have more cooperation in line with the interests of the people and the two countries," said Zarif.
Chabahar Port development
India also recently took over the running of part of Iran's Chabahar Port, in the Gulf of Oman, as the countries build closer ties.
India has placed $85 million machinery order for Chabahar, which is Iran's southernmost city.
“We have had a good discussion with the minister. The first ship from Brazil has already been received at Chabahar... The financial arrangement is ready. There were some problems, but we have resolved the issues,” Gadkari said.
“Proposals on barter system between the two nations can also be considered”, Gadkari said.
He said Zarif had given many proposals.
Earlier, Gadkari had said India plans to set up a urea plant at the strategic port complex to cut down on its huge subsidy on urea.
"They need steel, particularly real steel and locomotive engines, and they are ready to supply urea," he stated.
Zarif also said he was talking to Indian officials about selling more urea to India at a “reasonable” rate.
AFP, Reuters and Times of India contributed to this story.