"Recent headlines on India and Iran have been highly speculative," a US Government official said, referring to the reports appearing in a section of American and Indian media.
The report quoted Obama administration officials as saying that India has failed to reduce its purchases of Iranian oil, and if it doesn't do so, President Barack Obama may be forced to impose sanctions on New Delhi.
"No decisions have been made and we continue to have productive conversations with India on this important issue, both in New Delhi and in Washington," the official said.
"We welcome statements from Indian officials that India is seeking to diversify its crude oil sourcing and encourage this positive trend," the official said. In response to a query, sources in the Indian embassy indicated that US officials have reached out to them to convey that the news reports were "not an accurate reflection" of the US policy.
They remain focused on consultation and discussions with the Government of India on this issue, sources said. Under the Iran sanctions legislation, a country is subject to American sanctions if it doesn't make a "significant" reduction in its Iranian crude oil purchases during the first half of this year.
India imports 12 per cent of its oil from Iran, which is No 2 producer in the Organization of Petroleum Exporting Countries.