Unfazed by US, India to step up ties with Tehran

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Unfazed by US sanctions and Israel linking Tehran to the attack on an Israeli embassy car here, India is set to ramp up its energy and business ties with Iran, with a commerce ministry team heading to Tehran to explore fresh business opportunities.

The team is expected to go to Tehran later this month to discuss steps to expand India's trade with Iran, part of a larger strategy to pay for Iranian oil, said highly-placed sources.

Despite the US and European Union sanctions on Iran, India recently sealed a payment mechanism under which Indian companies will pay for 45 per cent of their crude oil imports from Iran in rupees.

Not just oil, India is also stepping up the refurbishing of the Chabahar Port in Iran and a strategic railway link that will offer it direct access to Afghanistan and the energy-rich Central Asia.

In recent years, India has taken care to insulate its multi-faceted ties with Iran from the West's collision with Tehran over its nuclear programme. The West accuses Iran of developing nuclear bombs.

India is uneasy at Israeli accusations about Iran's hand in the Monday bombing that targeted an Israeli embassy car, badly injuring the wife of the Israeli defence attache.

India, the sources said, does not want to be drawn into a diplomatic war of words between Tehran and Tel Aviv. Iran has rubbished Israeli charges as 'empty lies'.

But with Israel launching a diplomatic offensive and the American Jewish Congress (AJC) asking India to scale down its engagement with Iran, New Delhi could come under renewed pressure from the West to cut off ties with what the Americans say is a rogue regime.

India has launched a probe into the terror attack. 'The probe is on,' is all Indian officials would say.

K.C. Singh, a former Indian ambassador to Iran, told: "Anything is possible. We have to wait and watch."

Ajai Sahni, a terrorism expert, said it was very unlikely that the attack would ever be traced to the Iranian state.

But he agreed that India could be under extra pressure as Israel may leverage the incident to portray Iran as a rogue regime.

The American Jewish Congress has told Indian ambassador to the US Nirupama Rao that it was 'deeply troubled' by India's efforts to intensify trade relations with Iran at the very moment when the US and fellow democracies are applying new economic pressures on Tehran.

India continues to buy Iranian oil and expand economic relations with Iran.

Iran used to supply 12 per cent of India's oil imports, but for some time its share has dropped to 10 per cent.

Last week, as the European Union asked India to broker talks with Tehran over its atomic programme, Prime Minister Manmohan Singh pitched for a resolution of the issue by giving 'maximum scope' to diplomacy.