New payment mechanism can help tide over US constraints: Former Ambassador

India-Iran relations are going through a rough patch after India decided to cease purchase of crude oil following US refusal to extend its waivers. Former Ambassador Anil Trigunayat claimed that a new payment mechanism will help bypass economic sanctions by the US.

New Delhi: Following tension between the United States and Iran over lifting of sanction waivers on oil trade, former Ambassador Anil Trigunayat claimed that a new payment mechanism will help bypass economic sanctions by the US as Tehran understands India's stand on oil purchase.

Speaking to ETV Bharat, the former Ambassador claimed that US-Iran relation will have an impact on every oil importing country.

"India depends on West Asia for almost 80% of its import. The Trump administration's policy to redraw the nuclear deal with Iran, which was agreed by providing necessary economic waivers is causing tension in the region," he claimed.

India had ceased purchasing oil from Iran after the US refused to extend waivers on oil trade.

After exemptions expired on May 2, India said it will deal with the issue based on three factors -- the country's energy security, commercial consideration, and economic interests.

Speaking about the uncertainty in the India-Iran relations at the moment, Trigunayat said that Iran is a strategic partner in the region and both the nations have a long term view on the issues.

He also claimed that building a new payment mechanism will help India avoid economic sanctions and continue to meet its energy requirement via imports.

"A Riyal-Rupee payment mechanism will ensure trade with Iran without falling into US sanctions," he said.

Recently, Iranian Foreign Minister Mohammad Javad Zarif held talks with External Affairs Minister Sushma Swaraj. The talks were focused on the impact of the US ending waivers on import of oil from Iran and the ways to deal with it.

Read: Swaraj meets Iranian counterpart, US oil sanctions likely agenda