The visit by External Affairs Minister Sushma Swaraj to the oil-rich country comes nearly two weeks after Prime Minister Narendra Modi travelled to Saudi Arabia. (PTI file photo)
External Affairs Minister Sushma Swaraj will embark on a two-day visit to Iran tomorrow with an aim to step up engagement in a range of areas including oil and trade as the strategically important Persian Gulf nation is now ready to resume business as usual after lifting of sanctions under a historic nuclear deal.
The visit by Ms Swaraj to the oil-rich country comes nearly two weeks after Prime Minister Narendra Modi travelled to Saudi Arabia, another influential country which considers Iran its rival.
Iran is an important country for India for its energy security as well as to get access to oil and gas-rich Central Asian nations and Ms Swaraj's visit to Tehran is seen as a balancing act following PM Modi's trip to Riyadh during which both the countries had signed a number of pacts.
Following lifting of sanctions against Iran, India has been eying deeper energy ties with that country and has already lined up $20 billion as investment in oil and gas as well as petrochemical and fertiliser projects there.
From Iran, Ms Swaraj will leave for a two-day trip to Moscow to attend the annual Foreign Ministers' meeting of RIC (Russia, India and China). On the sidelines of RIC, Ms Swaraj is expected to meet her Chinese counterpart Wang Yi during which she is likely to raise the issue of China blocking India's bid to ban Jaish-e-Mohammad (JeM) chief Masood Azhar by the UN.
In Tehran, Ms Swaraj will hold extensive talks with her Iranian counterpart Mohammad Javad Zarif on Sunday during which entire gamut of bilateral relations will be reviewed with a major focus on ramping up ties in energy and trade sectors.
The External Affairs Minister will also call on Iranian President Hassan Rouhani.
Oil Minister Dharmendra Pradhan had paid a two-day visit to Tehran from April 9 during which he discussed with his Iranian counterpart the repayment of nearly $6.5 billion that Indian refiners owe to Iran.
This was the first visit by an Indian minister since the US and other western powers lifted sanctions against Iran in January.
During Ms Swaraj's visit, sources said, the two sides will also explore ways for cooperation in areas of banking and review of implementation of the Chabahar port project in which India is a key partner.
Ms Swaraj and Mr Zarif will also review implementation of the decisions taken by the two countries during the last joint commission meeting here in December.
The two ministers are also likely to deliberate on bilateral cooperation in combating terrorism, situation in Afghanistan and in Syria besides other regional issues.
New Delhi is looking to increase engagement with the sanction-free Iran by raising oil imports and possible shipments of natural gas. It also wants rights to develop Farzad-B gas field in the Persian Gulf discovered by OVL.
Sources, however, said a deal for the field was not signed during Pradhan's visit as Iranian Parliament, Majlis, is yet to approve the new Iran Petroleum Contract (IPC) under which the Farzad-B field is to be given to the OVL-led consortium.
Indian firms have so far shied away from investing in Iran for the fear of being sanctioned by the US and Europe. The same was deterring New Delhi from claiming rights to invest nearly $7 billion in the biggest gas discovery ever made by an Indian firm abroad.
But after the lifting of sanctions, India is making a renewed pitch for rights to develop 12.8 trillion cubic feet of gas reserves OVL had found in 2008.
Mr Pradhan also conveyed to the Iranian side that both countries must expand the basket of oil and gas trade.
He had also expressed India's interest in importing LPG from Iran and said companies from both sides could discuss setting up an extraction plant in Chabahar, if required.
India imports close to 12 million tonnes of crude from Iran. India's total crude import in 2015-16 was around 184 million tonnes.
In a related development, Iran has ended free shipping of crude oil to India and has terminated a three-year-old system of getting paid for half of the oil dues in rupees.
Iran is now insisting on being paid in Euros for the oil it sells to Indian refiners. It also wants refiners like Essar Oil and Mangalore Refinery and Petrochemicals Ltd (MPRL) to clear nearly $6.5 billion of past dues in Euros, according to officials.