US and India held a landmark 2+2 dialogue in New Delhi.
The United States does not intend to "penalise great strategic partners like India" but at the same time it expects all countries including India to cut oil imports from Iran to "zero" by November, US Secretary of State Mike Pompeo said on Thursday.
"We have told the Indians consistently, as we have told every nation, that on November 4th the sanctions with respect to Iranian crude oil will be enforced. We will consider waivers where appropriate, but that it is our expectation that the purchases of Iranian crude oil will go to zero from every country, or sanctions will be imposed," he said.
Mr Pompeo and Defence Secretary James Mattis held the first 2+2 Dialogue in New Delhi with External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman to bolster the strategic ties with India and step up defence and security collaboration.
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 (first 10 months of 2017-18 fiscal).
Mr Pompeo told journalists travelling with him that the United States would work with India on its planned purchase of a Russian missile and air-defense system known as the S-400.
India is planning to buy five S-400 Triumf missile air defence systems from Russia for around $4.5 billion.
The purchase will violate sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA) instituted by Congress on arms purchases from Russia, but lawmakers have allowed the possibility of a presidential waiver.
"There's been no decision made. But I will share that we do understand the history, right, of India's relationship with Russia and legacy systems. Our effort here, too, is not to penalise great strategic partners like India, a major defence partner.
"The sanctions aren't intended to adversely impact countries like India. They are intended to be a - have an impact on the sanctioned country, which is Russia," the secretary of state said.