Washington: The United States has said the rice trade between India and Iran would not be sanctioned as the American sanctions on Tehran include exceptions for exports of things like food, medicine and medical devices.

"US sanctions on Iran include exceptions for exports of things like food, medicine, medical devices. So from our perspective, this kind of trade would not be sanctioned," State Department spokesperson Victoria Nuland told reporters.

Nuland was responding to questions on news reports that Iran is defaulting on payments to India on its purchase of rice.

"If it is true, that Iran is defaulting, it would simply speak to the financial pressure that they're feeling around the world, from sanctions I would guess," she said, noting that the US is not in a position to independently confirm the Iranian default on a rice payment.

"The Indian Government is absolutely clear about our concern that countries ought to be weaning themselves off Iranian oil, and we are working together on how that might be achieved with India and with other countries," she said.

The US, she said, has no quarrel with the Iranian people.

"In fact, it is the Iranian people's future and their hopes and aspirations to live in a free, more democratic state that actually provides for them rather than siphoning off vital resources of the state into the nuclear programme that we are seeking to help them achieve here with these policies," she said.

"Our sanctions are designed to make it hurt the Iranian regime, that it is making the choice not to come clean on its nuclear program, not to allow the IAEA in to see what it needs to see," Nuland said.

"We frankly do regret the fact that this has begun to have some knock-off effect on the people. We are trying, through all of our media platforms to the Iranian people, to make clear that this is not directed at them, that our own policies do allow continued trading in food stuffs and medicines and medical supplies," Nuland said.

"Frankly, the bad choices that their government is making are chilling the international environment for any kind of trade with Iran. Iran's own isolation will end when it comes clean with the international community about its nuclear programme and particularly makes clear that it – and demonstrates that it doesn’t have intent to build a weapon," Nuland said.

"Our message to the regime is that they need to look very hard at what their lack of openness, their lack of transparency, the fact that they continue to profess that they don’t have or want a nuclear weapons programme but won’t demonstrate that to the world, what the knock-off effect of that is on their own people. These are their bad choices that are resulting in the situation on the ground in Iran," said the US official.