"Iran is keen on enhancing its ties with India," the official said, however.
India, Iran's biggest oil buyer after China, was among countries that continued to deal with OPEC-member Iran despite Western sanctions over Tehran's nuclear program.
"We are cutting gradually, and we will cut more if there is no progress in the matter of the award of Farzad B gas field to our company," one of the Indian sources said.
"Iran has corresponded with the Indians who finally submitted a proposal that would bring Iran no revenues after 30 years of operating the field," added the Iranian official.
"We cannot sign a 30-year deal out of fear from threats. No progress can be made under such circumstances," he said. "We are keen on enhancing our ties with India in field development projects and oil and petrochemical trade, but threatening is not a suitable language [for dealing with other countries]."