New Delhi:
Iran's deputy foreign minister Ebrahim Rahimpour is in India, a day after Iran signed an agreement with the US and five other nations, agreeing to limit its nuclear programme.
With oil supply fears easing, the impact was felt in the Indian markets. Shares of oil marketing companies including IOC, BPCL and HPCL rose after Brent crude dropped more than 2 dollars a barrel.
India's external affairs minister said, "India does not accept bilateral sanctions but despite that these sanctions make trading with Iran difficult." He said the deal was a positive development and India will be watching how it plays out in the region.
So what does this deal mean for India?
No new sanctions for six months means no further reduction in oil imports from Iran.
Recently, oil imports from Iran dipped and there was a fear that the sanctions might be tightened, further reducing oil imports.
During the financial year 2012-13, Iranian supplies made up for 7.2 per cent of the India's oil imports, down from 10.5 per cent in the previous fiscal year.
Without setting any time frame, the deal looks at easing of measures related to insurance. This gives hope to Indian refineries to get re-insured from European companies. The sanctions discouraged the refiners and led to reduction in oil imports.
This is also encouraging for the shipping companies to transport oil from Iran to India.
But will this deal open channels for India to pay Iran for its oil?
The deal makes it clear that oil related sanctions will stay along with those on banking and finance architecture, but adds that Iran will receive limited relief of around 7 billion dollars.
Will it infuse energy into the dormant India-Iran-Pakistan pipeline? Sources in the government say the pipeline, grappling with security and financing issues, is a distant dream but India has welcomed the deal.
Perhaps any positive development, however big or small between the US and Iran, is bound to make life easier for the Indian diplomats. Iran is not just a major supplier of oil but also strategically crucial for India.