PM Modi meets Iran President, discusses trade expansion days after US sanctions threat

Prime Minister Narendra Modi and Iranian President Masoud Pezeshkian discussed expanding and diversifying bilateral trade, the West Asia conflict and the safety of seafarers as they met on the sidelines of the Shanghai Cooperation Organisation (SCO) summit in Bishkek on Monday. This comes days after US has warned that economic engagement “of any kind” with Iran could trigger penalties as the Trump administration seeks to isolate Tehran financially.

The meeting came as the Donald Trump administration launched what US Treasury Secretary Scott Bessent called an “economic D-Day” campaign to isolate Iran, warning countries and companies that continued doing business with Tehran that they could face secondary sanctions and lose access to the dollar-based financial system.

Against that backdrop, PM Modi and Pezeshkian discussed ways to expand and diversify the India-Iran trade basket, while also taking up the evolving situation in West Asia and the safety of commercial shipping and seafarers.

“Met President Masoud Pezeshkian in Bishkek. Reiterated our commitment to strengthening India's long standing friendship with Iran across diverse sectors,” PM Modi said in a social media post.

“We want to expand and diversify our trade basket in the times to come. We had a discussion on the prevailing situation in the region. India will continue to support all efforts aimed at ensuring lasting peace,” he said.

The Ministry of External Affairs said the two leaders discussed bilateral ties as well as the evolving situation in West Asia.

The Modi-Pezeshkian meeting also comes days after Washington escalated its campaign against Tehran, including sanctions on four India-based companies over Iranian oil and petrochemical trade involving about USD 119 million.

Washington had previously targeted other India-based companies over alleged Iranian oil dealings, including four firms sanctioned in February and six companies and three Indian nationals targeted in July last year.

IRAN PUSHES BACK AGAINST US PRESSURE

Iran has rejected the latest US pressure campaign, with its Foreign Ministry calling the sanctions a threat to international law and the UN Charter.

“No honourable state that values its sovereignty and national interests will accept the normalisation of such gross lawlessness and systematic bullying,” it said.

Iranian Economy Minister Ali Madanizadeh said Tehran was “fully prepared” to withstand the latest measures and had a “two-year plan” to counter them.

Iranian Parliament Speaker Mohammad Baqer Ghalibaf also dismissed Washington’s threats against countries trading with Tehran as “big talk”.

“Iran's trade partners have also announced to us, both through the media and by sending messages, that they regard these statements as utterly meaningless,” he said.

“The Americans know that no one believes their big talk; the United States is not in a position economically to further restrict its relations with other countries,” Ghalibaf added.

He said the US was paying an economic price for its campaign against Iran and warned that sanctions would not force Tehran’s trading partners to cut ties.

INDIA RAISES SEAFARERS’ SAFETY

West Asia tensions and their impact on commercial shipping also figured in the Modi-Pezeshkian meeting.

The MEA said PM Modi expressed concern over the escalation of tensions and reiterated India’s position that the conflict must be resolved through dialogue and diplomacy.

“The prime minister expressed concern at the escalation of tensions in the region and reiterated India's consistent position that all issues must be resolved through dialogue and diplomacy,” the MEA said.

PM Modi also called for continued efforts to ensure lasting peace and stability in the region.

“Calling for safeguarding the freedom of navigation and commerce, he emphasised that civilians and civilian infrastructure, including commercial shipping and seafarers must not be harmed under any circumstances,” the MEA said.

The issue assumes significance as the continuing conflict has created disruptions and security risks for commercial shipping and maritime traffic in the region.

PEZESHKIAN SEEKS INDIA’S HELP FOR PEACE

According to an Iranian readout of the meeting, Pezeshkian thanked India for its support and cooperation with Iran during the recent war and called for greater diplomatic efforts to restore peace and security in West Asia.

“From the very beginning of our administration, our efforts have been focused on ensuring peace and security and resolving issues through dialogue and negotiations,” Pezeshkian said.

“Unfortunately, instead of making use of diplomatic mechanisms, the Americans have chosen the path of war, insecurity and imposing their will through force,” he said.

Pezeshkian said Iran had never welcomed war and that its responsibility was to protect its people from danger and insecurity while creating conditions for “peace, tranquillity and security”.

Referring to agreements reached during efforts to resolve existing issues, the Iranian President said Tehran had remained committed to its obligations but accused the US of failing to fulfil its commitments.

“The Islamic Republic of Iran has remained committed to the obligations it has undertaken within the framework of the agreements, but unfortunately, the American side has failed to fulfill its commitments,” he said.

“Nevertheless, we continue to work toward achieving agreement and understanding, and we believe that the continuation of war is in the interest neither of us, nor of the region, nor of humanity,” he added.

Pezeshkian also argued that groups within the US wanted the conflict to continue because they saw it as serving their interests.

“We believe, however, that by strengthening the forces committed to peace, we must move toward peace, stability and security,” he said.

IRAN WANTS DEEPER INDIA TIES

Pezeshkian referred to India’s position and capabilities in the region and globally, as well as the deep historical and cultural ties between the two countries, and urged Modi to use India’s contacts with various parties to help move the region away from conflict.

He asked India to help the sides move away from “war and bloodshed” and return to dialogue and agreement.

“We believe that the solution to the issues we face lies in dialogue and cooperation, and that all available capacities must be mobilized to prevent the spread of insecurity and conflict,” Pezeshkian said.

The Iranian President also expressed Tehran’s readiness to deepen bilateral ties with India across sectors.

“Iran and India possess extensive capacities for expanding cooperation in political, economic, scientific, cultural and other areas of mutual interest. By strengthening bilateral cooperation and neutralizing the effects of sanctions, we can further elevate the level of relations between the two countries,” he said.

Pezeshkian also referred to efforts by the US and Israel to restrict Iran’s cooperation with other countries.

“Despite the pressures and restrictions being imposed in an attempt to obstruct Iran’s relations with other countries, Tehran is ready to expand its cooperation with India across various fields,” he said.

OIL MARKET FEARS EASE

The shift from direct military confrontation towards economic pressure has also eased some concerns in the oil market, according to a Reuters report citing Ole Hansen, head of commodity strategy at Saxo Bank.

Hansen said Washington’s latest sanctions package was less aggressive than some traders had anticipated.

The renewed focus on economic measures has also raised hopes that Washington and Tehran could return to negotiations aimed at ending the conflict, oil trading adviser Ritterbusch and Associates said.

The war began after the US and Israel launched strikes against Iran in late February.

Signs of a possible diplomatic opening have emerged, with Iran and Oman saying they discussed a proposal for a “joint temporary navigational corridor” through the Strait of Hormuz, along with plans to clear mines from the strategic waterway.

However, Ritterbusch and Associates cautioned that the sharp fall in oil prices had potentially gone too far and warned that prices could rebound sharply if Iran responded with attacks on US military installations across the Middle East.

PM MODI INVITES PEZESHKIAN FOR BRICS SUMMIT

During the meeting, Modi reiterated India’s readiness to work closely with Iran through multilateral platforms, including BRICS and the SCO.

The Prime Minister also conveyed that he looked forward to welcoming Pezeshkian to India for the BRICS Summit, according to the MEA.

PM MODI MEETS ARMENIAN PM

Separately, Modi held a bilateral meeting with Armenian Prime Minister Nikol Pashinyan on the sidelines of the SCO summit in Bishkek.

“A wonderful meeting with Prime Minister of Armenia, Mr Nikol Pashinyan on the sidelines of the SCO Summit in Bishkek,” PM Modi said.

He said India-Armenia cooperation was set to grow across defence, IT, space, education and pharmaceuticals, while trade and investment ties would also be deepened.

“India-Armenia cooperation is all set to grow in defence, IT, space, education, pharmaceuticals and more. We are equally certain to deepen trade and investment linkages in the times to come,” PM Modi said.