In its report meant for United States lawmakers to take informed decision, the CRS said India and Iran have overlapping histories and civilisations, and they are aligned on several strategic issues. The EU has promised to protect its business interests against the impact of U.S. sanctions against Iran.
India will settle payments for Iranian oil using rupees through local banks starting in November as USA sanctions will make it hard to settle trades through European banks, two industry sources said on Thursday.
Earlier, India was looking at the possibility of falling back on the rupee-rial arrangement for importing oil from Iran in the wake of USA sanctions.
Speaking at a press conference in Tokyo, Tsukioka said that it would be up to individual refiners to take their own decisions on Iranian crude oil imports.
India is yet to take a call on complying with the USA sanctions on Iran.
South Korea, in turn, has replaced Iranian crude with imports from Saudi Arabia and Iraq, according to the energy ministry, but it is also in talks with the USA to get a waiver.
Tens of millions of India's citizens are Shiite Muslims.
"We are very closely monitoring the developments and assessing their implications", ministry spokesperson Raveesh Kumar said in a media briefing here.
US President Donald Trump had in May withdrawn from the 2015 nuclear accord with Iran, re-imposing economic sanctions against the Persian Gulf nation.
The port facilitates access to Afghanistan by bypassing Pakistan and is also a vital link in the International North-South Transport Corridor. India has said that the implementation of Joint Comprehensive Plan of Action (JCPOA) sanctions relief in January 2016 paved the way for work to begin in earnest on the Chabahar project.
"We are in touch with all stakeholders in the matter", Kumar said.
They said the European Union has been telling India that it was in the process of coming out with a payment mechanism as using U.S. dollars for oil transaction will be restricted post-November 4 when the United States sanctions come into force. Oil refiners such as state-owned Indian Oil Corp (IOC) and Mangalore Refinery and Petrochemicals (MRPL) could use UCO Bank or IDBI Bank to route oil payments to Iran, the official added. Some sanctions took effect from August 6 while those affecting the oil and banking sectors will start from November 4.
Many refiners in Japan, the world's fourth-biggest oil consumer, say they are resigned to completely halting imports from one of their historically important suppliers, unlike during a previous round of sanctions when they only reduced imports from Iran.