The US embargo on Iran oil shipments has put Prime Minister Narendra Modi in a quandary. If he plays along, India could find itself on the right side of President Donald Trump on trade but lose cheap supplies and precious foreign exchange. While ending purchases from Iran will cost India savings on shipping costs and the longest credit period offered by any of its suppliers, there are gains to be had from paring the trade surplus with the US — at the heart of Trump’s trade war with China. For one, it will soften approach on thorny issues such as it being named in the US Treasury’s watchlist of potential currency manipulators who use exchange rate to boost exports. Narrowing trade surplus may also help India win exemption on tariff imposed by US on some of products, including steel and aluminium.

(Business Standard)