Nuclear deal between the US and Iran expected to close soon and India is watching the developments from close quarters. It will be one of the beneficiaries if the deal consummates. Zee Business’ Varun Dubey explains the impact of the deal from India's standpoint. 

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US sanctions have impacted India's chances of buying crude oil from Iran post the sanctions. But the United States said on February 17 that “substantial progress” during negotiations in Vienna to save the Iran nuclear deal had been made, hinting at an agreement possible within days if Iran “shows seriousness” on the matter.

A major percentage of the total imported crude oil, i.e. 80 per cent by India, used to come from Iran. Iran was the third biggest supplier for India for its crude oil requirement. Iran’s contribution was 5 per cent in the world’s crude oil production.

If sanctions get removed, India will benefit by decreasing its trade bill because. India used to pay around 45 per cent in INR to Iran when it purchased crude oil from Iran. But now it has to completely pay in USD.

India also used to benefit by trade credit, insurance, etc. India will decrease its trade deficit if it starts dealing in crude oil with Iran again.

Additionally, Iran imports many commodities from India. Rice, sugar and tea are major commodities are being exported from India. When there are sanctions are being implied, these commodities don’t get affected, but the bank exchanges do.

Moreover, the graphite being exported from India used to 7 per cent to 8 per cent. 

Overall the removal of sanctions on Iran by the US will prove to be beneficial for India.

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