India's merchandise exports to Iran are in accordance with its international obligations and the United Nations sanctions on Iran.
However, US and euro zone sanctions on Iran have the potential to disrupt India's trade with Iran, minister of state for commerce and industry Jyotiraditya M Scindia informed the Rajya Sabha in a written reply today.
The minister's comments come at a time when the US is trying to egg India to reduce its dependence on Iranian crude.
US state department spokesperson Victoria Nuland said on Tuesday that the US planned to have more consultations with New Delhi on the issue.
Speaking to reporters on the progress in the discussions US emissary on energy Carlos Pascual had with Indian officials in New Delhi, Nuland echoed secretary of state Hillary Clinton's report on India - "we are making progress".
"There is more progress to be made and that's what Carlos is talking about and we will have more on his consultations after they are complete," Nuland said.