India, Iran discuss trilateral cooperation with Afghanistan; issue of oil payments nowhere near resolution

New Delhi

6 July 2011

Foreign secretary Nirupama Rao discussed trilateral cooperation among India, Iran and Afghanistan in her talks in Tehran, signalling a movement beyond mere articulation of positions to possibly a structured consultation on the situation in Afghanistan.

Ms Rao called on foreign minister Ali Akbar Salehi on Tuesday and held talks with deputy foreign minister for Asian and Asia-Pacific affairs Mohd Ali Fathollahi. She met with Saeed Jalili, secretary of Iran's supreme national security council, on Wednesday.

The situation in the Arab world, anti-piracy cooperation and consular issues were among other issues that Ms Rao discussed in her talks with Mr Fathollahi, who first mooted the trilateral cooperation during his visit to India in August 2010.

Ms Rao's visit to Iran followed that of national security adviser Shivshankar Menon in March, on the eve of the Persian New Year.

Prime Minister Manmohan Singh has shied away from visiting Iran but an opportunity could present itself in 2012 when Iran hosts the NAM Summit.

Ms Rao's visit comes amid India's continuing search for an amicable solution for crude-oil payments to Iran. Iran has been selling crude to India on credit (the outstandings are over Rs 4,400 crore) since December 2010, when the Reserve Bank of India discontinued the practice of routing payments through a regional clearinghouse called the Asian Clearing Union in view of the US sanctions on Iran.

India switched to the services of the German-Iranian Europaish-Iranische Handelk AG (EIH) bank based in Hamburg but the European Union's sanctions against the bank in May forced Germany to terminate the facility. Petroleum and natural gas minister Jaipal Reddy has said that efforts were being made to ensure uninterrupted oil supplies from Iran. Iran is India's second largest source of imports after Saudi Arabia.

Ms Rao's visit came a year to the day since her July 5, 2010 speech in New Delhi in which she spoke about India pursuing its ties with Iran independent of the US, making accelerated efforts" to complete infrastructure projects, and how India was "justifiably concerned that the extra-territorial nature of certain unilateral sanctions recently imposed by individual countries" could adversely affect India's energy security.

The bilateral ties have remained in disrepair since 2005 when India voted against Iran in the IAEA.