Peaceful settlement Iran’s nuclear programme with P5+1 countries in Geneva on November 24 has raised India’s hopes of increasing its crude oil purchases from that country. This would not make oil prices cheaper in the country but also reduce the pressure on the Indian rupee.

“Our work on development of the Chabahar port will continue as this does not fall under the purview of the sanctions imposed by the Western powers against Iran,” said the Official Spokesperson in the Indian External Affairs Ministry, Syed Akbaruddin

India is investing $100 million for improving the port’s berthing facility and expanding its container terminal. India proposes to bypass the Pakistan route to have connectivity with Afghanistan via Chabahar port in Iran. It has already invested $100 million or more on a road connecting the town of Delaram, on the Kandahar–Herat highway, to Zaranj near the Iranian border, and has ambitious plans to build a 900km railway between Chabahar and Afghanistan’s potentially lucrative Hajigak mine, 130km west of Kabul in a mountainous region of Bamiyan province. An Indian consortium led by public sector SAIL holds rights to develop four of the five mining blocks at Hajigak, which is estimated to contain 1.8 billion tonne of iron ore.

As the P5+1 talks in Geneva eased some sanctions against Iran, India is hopeful of increasing its crude oil purchases from that country. It has cut down crude oil shipments by 15% this year to win waivers on US sanctions.

India's imports from Iran fell to about 170,000 bpd in April-October, a decline of about 40 percent from a year ago, the data shows, as two refiners halted purchases at the beginning of their fiscal year because of the insurance problems.

India, therefore, has room to increase its imports after it declined around 40% this year to below even what was permitted by sanctions. After an agreement reached with P5+1 countries Iran will be able to boost its exports after six months from now.

“India intends to buy up to an average 220,000 barrels per day (bpd) of oil from Iran in the fiscal year ending March 31,” Petroleum Secretary Vivek Rae said.

India tops the list of four major buyers of Iranian crude oil. India would also then be looking to increase imports in the 2014/15 financial year, depending on any further easing of the sanctions, Rae said.