Iranian oil field
An Iranian oil field.Reuters

Iranian foreign minister says that India is committed to buying oil from Iran and continuing economic cooperation despite US sanctions on export of Iranian oil, reports Reuters.

Iran's foreign minister Mohammad Javad Zarif met his Indian counterpart Sushma Swaraj on the sidelines of the United Nations General Assembly in New York.

"India has categorically stated that it intends to carry on economic cooperation and continuing the import of oil from Iran and my Indian counterpart has backed it," said Zarif on being asked about oil imports by India.

In May this year, US President Donald Trump withdrew from the nuclear deal with Iran which was followed by plans to impose sanctions on Tehran, which is the third largest producer of oil in the world.

US is pressurising allies to stop oil imports from Iran once the sanctions start on November 4.

After China, India is the second largest importer of Iranian oil and it has reduced import but is yet to decide whether to end purchasing oil completely after the sanctions are in place.

India decided to increase oil purchase from Iran in the current financial year after Tehran offered free shipping and extended credit period.

India was one of the few countries to continue trading with Iran when the previous round of sanctions was in place.

Zarif also expressed the desire to expand bilateral ties with India and the Chabahar port in Iran is a testimony to that.

The port complex, to be fully operational in 2019, is being developed by India as it provides a transport corridor to land-locked Afghanistan and beyond for trade bypassing ports in Pakistan, access to which has been denied to India.

The Iranian foreign minister said the port is functional and it wants to expand its capacity with the help of India and other investors.

A government of India source told Reuters that India is contemplating a bank guarantee equivalent to $3.5 million for the development of the port through the UCO Bank.