India on Wednesday called for resolving the Iranian nuclear issue peacefully through dialogue and diplomacy even as analysts suggested that President Donald Trump’s decision to pull the US out of the 2015 pact with the Islamic nation could have far-reaching implications for New Delhi.

In response to media queries on the US withdrawing from the Joint Comprehensive Plan of Action (JCPOA) between major Western powers and Iran, External Affairs Ministry spokesperson Raveesh Kumar said the issue should be settled by respecting Iran’s right to peaceful uses of nuclear energy as also the international community’s strong interest in the exclusively peaceful nature of Iran’s nuclear programme.

‘’All parties should engage constructively to address and resolve the issues that have arisen with respect of the JCPOA,’’ he added.

The fear in New Delhi is that oil prices could start soaring in view of the impending sanctions against Iran, impacting India at a time when the country is set to emerge as the fastest growing economy.

Iran is currently India’s third biggest oil supplier after Iraq and Saudi Arabia and any increase in prices will hit both inflation levels as well as the Indian Rupee in the election season. India could be forced to start reviewing the list of its oil suppliers to minimise the impact of increase in oil prices on the economy, sources said.

After Iranian President Hassan Rouhani’s visit to India in February, New Delhi had committed itself to increasing oil imports from Iran. India and Iran had also agreed to take measures, including Indian investments in rupees and initiating new banking channels between them, to enhance economic engagement. It is to be seen whether the US will exert pressure on India to stop trading with Iran in local currencies.

The US might also ask India to abandon or at least go slow on the development of the Chabahar Port in Iran, which provides it with a strategic transport link to Afghanistan bypassing Pakistan. New US sanctions could, in fact, even bring plans to develop the key port to a halt.

There is also an apprehension that the US might not take kindly to any move by the Shanghai Cooperation Organisation (SCO) to admit Iran as a member of the grouping at its summit in China in June. India and Pakistan became a full member of the grouping, dominated by China and Russia, last year. The SCO is seen in strategic circles as an umbrella organisation of anti-American powers.

Should Iran be admitted to the SCO, India will be seen to be a member of an anti-American bloc, making a mockery of Indo-Pacific initiatives like the quadrilateral with the US, Japan and Australia, analysts observed.