India must try and play the important role of being the intermediary between Iran and the US in forging some kind of business alliance, particularly in areas like petroleum industry

Since 2012, India has been paying for Iranian oil imports both in rupees and Euros, by a special arrangement, under which 45% of the dues are paid in rupees into their UCO bank account in Kolkata and the balance paid in Euros, mostly through Turkey. The rupee account is over $3 billion in credit, but, thankfully, our exports of agri-products such as soya, basmati and pharmaceutical items have picked up, but not enough to offset this balance.

Particularly after conditional withdrawal of sanctions by US and its European allies, it is found that full normalcy is yet to be restored. This may remain so until such time the big powers realise and accept Iranian nuclear programme is indeed planned for its peaceful national needs, rather than to achieve nuclear weapons.

Iran continues to operate its rupee account with UCO Bank in Kolkata and had sought assistance in opening accounts with other banks, possibly in metropolitan cities, so that there are no delays in settlement as negotiable documents for exports from India have to go to Kolkata for final processing.

The balance of 55% against oil imports have to be paid in Euros, and this has been pending since 2013 (early February) because of the sanctions. In the meantime, efforts to increase non-traditional items of exports, such as securing turnkey jobs like road and rail links from Iran's Chabahar (or Chah Bahar) port to Turkmenistan have come to public knowledge.

It is therefore, gratifying to note, from press reports, that serious efforts are underway by Indian government owned organizations like Ircon International Ltd (IRCON) and RITES Ltd (also known as Rail India Technical and Economic Service) to obtain project contracts, particularly related to port developments at Chabahar, where India is already associated. This rail-road link, if obtained, will not only help Iran domestically, but also assist Indian goods being ferried to countries from the Commonwealth of Independent States (CIS), starting with Turkmenistan.

Another recent development in Iran in which ONGC Videsh Ltd or OVL, the overseas arm of ONGC and its partners have discovered gas and oil in Iran's Farsi offshore block, now named, as Binaloud oil field. Media reports indicate that this one of the largest finds of its kind, in as much as, the gas field is estimated to hold in place reserves of up to 21.68 trillion cubic feet (tcf) of which 12.8 tcf of gas and 212 million barrels of condensate may be recoverable.

As a sequel to the US sanctions on Iran, it may be recalled, ONGC was one of the organisations that was affected earlier, but not now, it is, so to speak, off the hook. ONGC has also shown serious interest in getting US shale but it must bear in mind that US may still have conditions relating to its oversea partners working with Iran, in one form or another! It may become rather difficult choice to make, whether to go in for shale in the US or take greater interest and involvement in the development of Binaloud block in Iran, which is closer and may offer long term potential in related developments in Iran itself. Set against this, there is already many issues relating to shale production in the US itself, and needs a serious in-depth study before a decision is made.

India must rethink in doing any development work in shale domestically because of the lack of water, the prime material for injection into the wells and which contaminates the area, besides the inadequate technology in the country. If they can obtain shale from US and other suppliers, they may do so, but if the US says "either us or them", it is better not to be involved in shale!

India occupies a unique position in the world history. It is time we took advantage of the historical past, and act in a most diplomatic fashion, like Pakistan did, years ago, in arranging for a crucial visit by the then US President Nixon to China. India must try and play the important role of being the intermediary between Iran and US in forging some kind of business alliance, particularly in areas like petroleum industry, where Iran is novice as far as technology is concerned.

India needs both and the best course of action would be to try and have the cake and eat it too! At the same time, knowing our vulnerable situation, Iran may try and force our hand, particularly in regard to involvement in Binaloud, and we need to convince them to come to mutually workable terms.

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)