Visiting US Secretary of State Hillary Clinton urged India to reduce its imports of Iranian oil, while a new US law will next month slap sanctions on nations that buy oil from Tehran.
India, which depended on Iran for 12 percent of its imports last year, has underlined that it would not join US and European-led efforts to choke off Tehran's oil revenues.
"We have a strong interest in a peaceful and negotiated settlement of issues relating to Iran's nuclear program," Indian Foreign Minister S.M. Krishna told a joint news conference with Clinton.
Krishna acknowledged that Iran "remains an important source of oil for us", and said of the reductions, "Ultimately, it reflects the decision that refineries make based on commercial, financial and technical considerations."
"This issue is not a source of discord between our two countries," he insisted.
India, which is heavily dependent on energy imports, remains the largest single buyer of Iranian oil.
Under a new law, the United States will impose sanctions starting on June 28 on banks from countries that keep buying Iranian oil. The US State Department has already exempted European Union nations and Japan.