India has cut imports from Iran to 17.44 million tons in the fiscal year ending March 31, 2012, from 18.50 million tons in financial year 2010-11. This fiscal (April to March), imports would further be trimmed by 11-20 per cent (2 to 4 million tons).
"We have displayed our commitment by cutting imports from Iran. Iran has been relegated as the third largest supplier of crude oil. In 2011-12, it made up for about 10 per cent of the total imports, down from over 12 per cent previously," a top government official said.
In 2012-13, Iran will supply only 7-8 per cent of the nation's oil needs, the official said.
The United States may as early as next week announce a new list of countries that will receive exemptions to financial sanctions on oil trade with Iran. The US had in March granted Japan and 10 European Union countries an exception and had signaled it has had good talks with South Korea about reducing oil purchases.
Without a waiver in sanctions, New Delhi may find it difficult to ship oil from July as insurance companies will not extend cover to ship ferrying Iranian oil.
A way out could be the government allowing Iranian insurance companies to provide cover to ships carrying oil and paying Iran in Indian rupee, he said. "There are discussions happening ... we are hopeful something will come out". Currently, Indian refiners pay Iran in euros through a bank in Turkey.