Israel hails India's moves to tighten sanctions against Iran

Israel described as a "positive trend" India's moves to tighten sanctions against Iran and stop illicit business with the country and said this signalled an evolving attitude of New Delhi towards the Islamic Republic.

Attributing the change in trend to US President Barack Obama's trip to India in November last year, The Jerusalem Post reported that this change in India's relations with Iran was seeing evolving even before Obama's visit, which had helped the trend.

The daily claimed Teheran had refused to sell oil to India because of new rules instituted by New Delhi to prevent Indian businesses from doing illegal trade with Iranian companies.

Officials from the central banks of both countries are expected to meet Friday to discuss the new regulations.

India, said to be importing 400,000 barrels of crude oil a day from Iran, has barred its companies from dealing with Iran through the Asian Clearing Union (ACU), a financial clearinghouse that includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka, the report said.

This clearinghouse allows central banks to handle payments to their countries' companies, and according to a Wall Street Journal report, makes it possible to obscure which firms are doing business.

The US Treasury has reportedly regularly raised the issue with India, and discussions on this matter accelerated after Obama's visit when he endorsed permanent membership for India on the UN Security Council, the daily said.

The US has told New Delhi that Indian firms conducting transactions through the ACU run the risk of violating a US law signed in July banning international firms from doing business with 17 Iranian banks and much of Teheran's oil and gas sector, as well as the Revolutionary Guard, it said.

If Indian companies are found in violation, they could be banned from doing business in the US, according to the report.

While India imports about 14 per cent of its crude oil from Iran, a level down from 16.5 per cent in 2009 and in turn it provides about 40 per cent of all the refined oil used in Iran.

The UN sanctions adopted this summer neither forbids purchasing Iranian oil, nor places a ban on selling refined oil back to the Islamic Republic.