India ready to deal with US sanctions on Iran, made necessary provisions

A top government adviser said that India has made necessary provisions and prepared for any possible scenario related to fallout of the US sanctions on Iran.

During an interview with news agency, Sanjeev Sanyal, the Finance Ministry's Principal Economic Adviser said it's better to wait for anything to happen before commenting or taking any actions against it.

"We have already weighed our options... various scenarios have been thought about and in each one, certain series of sequences have been planned. Provisions have somewhat been made where necessary. In many cases, you just have to do it when it happens. The key is to react fast,'' Sanyal said.

"So rather than predispose ourselves to a particular line of response, what we can do is have a whole bunch of options and then as things evolve, we know which option to take. The point is to maintain optionality rather than pre-commit to a certain sequence," Mr Sanyal added.

Not only sanctions against Iran is the external factor which concerns Indian economy, but also factors like rising oil prices and the US-China trade war.  

"There is the trade war looming. We have oil prices which we need to look out for. And the US is tightening its monetary policy. These are not new concerns they have been building up for some weeks now, if not months. But these are concerns that will have an impact on us," Mr Sanyal said.

He said while the impact of these events is "non-quantifiable", the best option for India is to "watch carefully what happens, how systems evolve and to respond quickly to protect national interests," he added.

"The point is that since we don't know how the trade war and many of these things will pan out, or oil prices for that matter, so we will have to wait," he concluded.

Mr Sanytal also said that government's focus is to clean up the banking system ensure credit flow to micro, small and medium enterprises (MSMEs) and simplify the GST.