Secretary of State Mike Pompeo said Thursday that talks were ongoing on whether to grant waivers for India from US sanctions on Russia and Iran as he made it clear that Washington's intention is not to "penalise great strategic partners like India." Pompeo and Defence Secretary James Mattis held the first 2+2 Dialogue here with External Affairs Minister Sushma Swaraj and Defence Minister Nirmala Sitharaman to bolster the strategic ties with India and step up defence and security collaboration. Pompeo told journalists travelling with him that the United States would work with India on its planned purchase of a Russian missile and air-defense system known as the S-400. India is planning to buy five S-400 Triumf missile air defence systems from Russia for around USD 4.5 billion. The purchase will violate sanctions under the Countering America's Adversaries Through Sanctions Act (CAATSA) instituted by Congress on arms purchases from Russia, but lawmakers have allowed the possibility of a presidential waiver. "There's been no decision made. But I will share that we do understand the history, right, of India's relationship with Russia and legacy systems. Our effort here, too, is not to penalise great strategic partners like India, a major defence partner. "The sanctions aren't intended to adversely impact countries like India. They are intended to be a \u2013 have an impact on the sanctioned country, which is Russia," the secretary of state said. "And so we'll work our way through the waiver decision as the days and weeks proceed, and we'll do that alongside our partner, India, as well," he said. He said the US was working to impose CAATSA Section 231 in a way that is appropriate and lawful and to exercise that waiver authority only where it makes sense. "And we as a team, the national security team, will work on that, and as we continue to have these conversations with India about that, I think come to an outcome that makes sense for each of our two countries," he said. On the issue of India's oil imports from Iran, Pompeo said, "We have told the Indians consistently, as we have told every nation, that on November 4th the sanctions with respect to Iranian crude oil will be enforced. "We will consider waivers where appropriate, but that it is our expectation that the purchases of Iranian crude oil will go to zero from every country, or sanctions will be imposed." The US has told India and other countries to cut oil imports from Iran to "zero" by November 4 or face sanctions, making it clear that there would be no waivers to anyone. Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia. Iran supplied 18.4 million tonnes of crude oil during April 2017 and January 2018 (first 10 months of 2017-18 fiscal). "So we'll work with the Indians. We committed that we would do that. "Many countries are in a place where they \u2013 it takes a little bit of time to unwind, and we'll work with them, I am sure, to find an outcome that makes sense," the top US diplomat said. "And from whence they purchase the other crude oil, we're happy to see if it's American products that are able to deliver for them. I think that'd be a great outcome. But our mission set is to make sure that Iran doesn't engage in malign behaviour with wealth that comes from countries around the world, thus the purpose of the sanctions," he said. On the difference with India on the issue of trade, Pompeo said, the US wanted it to be "very straightforward, free, fair and reciprocal." "We want the trade balance, the trade deficit that the United States has in its trade with India, to be rectified. "They have made some progress on that, and we thank them for that. They're going to buy more energy products from the United States. They're going to purchase more aircraft from the United States. We truly do appreciate that. But the gap will remain, and so we are urging them to do all that they can to narrow that gap," he said. At the same time, he said it was important that the trade barriers that are there, places that American companies' and American workers' products can't be sold here, be reduced. "And so very consistent what President Trump is seeking all around the world are the things we talked about with our Indian counterparts here today," Pompeo said in response to a question. India-US bilateral trade is estimated at around USD 74.5 billion. India has a surplus of USD 23 billion in trade with the US, and Washington wants to reduce it by forcing New Delhi to buy more American products. New Delhi is also concerned over recent US move to increase tariffs on steel and aluminium imports from countries China and India.