EU asks India to help bring Iran to nuclear talks

"In order to achieve that result, you need more pressure on Iran, more sanctions on Iran," he said.

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As well as deep historical ties, India and Iran have shared interests that include the stability of Afghanistan as Western powers draw down their troops. India is now Iran's main oil customer, even though it has diversified imports lately because of the payments problems thrown up by new sanctions.

At an earlier news conference, India's Prime Minister Manmohan Singh said the nuclear issue needs to be resolved through diplomacy and defended buying Iran's oil.

"Iran is a close neighbour. It is an important source for our energy," he said.

"There are problems with Iran nuclear programme. We sincerely believe that this issue can be and should be resolved by giving maximum scope to diplomacy," Singh said.

On the eve of the summit, India's trade secretary, Rahul Khullar, said there was no reason why India should not take advantage of business opportunities arising as European companies reduce sales to Iran.

Iran is turning to barter - offering gold bullion in overseas vaults or tankerloads of oil - in return for food as the new sanctions kick in, hurting its ability to import basic staples for its 74 million people.

A large delegation of Indian businessmen is heading to Tehran in the next few weeks to explore new trade opportunities. India observes U.N. sanctions but was still free to trade a vast range of products with Iran, Khullar said.

Reuters surveys of commodities traders around the globe show that since the start of the year, Iran has had trouble securing imports of basic staples like rice, cooking oil, animal feed and tea. Grain ships have been held at its ports, refusing to unload until payment can be received for cargo.

Difficulty paying for urgent import needs has contributed to sharp rises in the prices of basic foodstuffs, causing hardship for Iranians with just weeks to go before an election seen as a referendum on President Mahmoud Ahmadinejad's economic policies.