"I think that on this entire question of purchases of Iranian crude, that is something that we do with Iran. I am not sure that we would want to raise it from our side. If the United States wants to raise it, it is welcome to," the foreign secretary told reporters.
India's current waiver from the sanctions runs out in December.
But domestic refiners could struggle to import the amounts implied by the oil ministry in the year from April 1, 2013 because they have already signed up with other suppliers as financing problems triggered by sanctions hit Iranian imports.
Asia's third-largest economy imports about 4 million barrels per day (bpd) of oil or around 80 per cent of what it uses. Iran ranked ninth among India's crude suppliers in August, down from sixth a year ago.
The oil ministry said in the memorandum that last year's cut in imports from Iran of 29 per cent was well below the 15 per cent cut to qualify for a sanctions waiver.
It therefore argues India should be allowed to cut in 2013/14 from a theoretical 2012/13 level of about 309,000 bpd, based on cutting 15 per cent from the previous year.
"This option needs to be pursued more vigorously, since it would entitle India to import about (261,000 bpd) of crude oil from Iran in 2013/14," the memorandum said.
But in practice, raising imports from Iran to that level will be difficult.
According to data compiled by Reuters, India has shipped in about 44 per cent less oil from Iran in the first five months of the current contract year starting April 1, or about 141,000 bpd, because of problems securing insurance for processing it.
That would mean refiners would have to step up imports to about 345,750 bpd for the rest of the year. They have already agreed contracts with other suppliers to replace lost Iranian volumes and have little flexibility to switch back.
Data from industry sources and Reuters calculations indicate that instead, India's imports from Iran will run about 190,000 bpd in the year to March 31, 2014.