New Delhi, Apr 23 (UNI) In the wake of Trump administration demanding that countries no longer import any oil from Iran, removing waivers from US sanctions on crude, Trade Promotion Council of India expressed deep concern and said India is net importer of oil from Iran and unilateral threat to sanctions, who do not abide by the US call is unjustified and biased.

'It is also against the cardinal principle of free and fair trade. Exports Sector is bound to be hit as oil is the intermediate product in all kinds of production and services,' TPCI Chairman Mohit Singla said in a statement here.

The Trump administration is demanding countries no longer import any oil from Iran, removing waivers from US sanctions on crude granted to some of Iran’s largest customers as part of an escalating effort to pressure the regime in Tehran and bring Iran’s crude exports 'to zero'.

Mr Singla said, 'India is oil and petroleum dependent sector and its demands are met by the import of oil. There will be immediate rise of 3-5 per cent in crude oil prices owing to the slated sanction, which will not only hit the domestic production and imports.'

He said the global data of crude oil prices shows a jump of 50 per cent in the recent two month.

'High crude price will have a negative impact on the fiscal and current account deficits of the economy. Increase in these deficits will lead to higher inflation and also impact monetary policy, consumption, and investment behaviour in the economy,' he said.

'It is estimated that 10 per cent increase in oil price will increase the trade deficit by 7 billion dollars , that is, trade deficit will widen by 560bps and lower GDP by 0.2 per cent. This will in turn weigh on the rupee too, which is expected to depreciate further, making the import much costlier,' Mr Singla remarked.

He said India and Iran are the old and natural allies and the two countries are free to do trade with any country which gives competitive pricing on oil import.

'The unilateral sanction will be exempt for India as it hopes the US will allow its allies to continue to buy some Iranian oil instead of halting the purchases altogether from May. Iran is also trading in rupees and has imported 12 lakh tonne of basmati rice, last year, which is huge advantage for India,' he said.

India, Iran's biggest oil client after China, has almost halved its Iran oil purchase since November. That was when Washington granted significant reduction exceptions (SREs) from sanctions to countries, including India.

Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018. India could overtake China as the world’s largest oil demand growth center by 2024.

Mr Singla requested government to take this aggressively as the crucial exports which were at all-time high last Financial Year, will meet a roadblock if such sanctions are thrust on India. He said, 'I am sure the government of India must be looking at the development closely and will do its best keeping the concern of exports sector in mind.'

UNI RSA ADG 1823