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India leverages Iran’s woes

Indian diplomacy is doing splendidly well in leveraging the United States’ sanctions against Iran to its advantage. All indications are that India has cut down its oil imports from Iran despite the official stance that India observes only the UN sanctions on Iran. The visiting US Secretary of State Hillary Clinton expressed appreciation more than once this week that Washington feels “encouraged” by the Indian government decision to reduce oil purchases from Iran.

She went a step ahead and offered help to India to diversify its sources. In fact, a senior US official is on his way to Delhi to help India locate alternate oil supplies. Reuters, meanwhile, confirmed that India’s oil imports from Iran in April dropped by over 30 percent. No wonder, Clinton was absolutely thrilled.
In the face of these hard facts, our government now concedes finally that, yes, oil imports from Iran have been reduced. But the new mantra is that this is due to “commercial, financial and technical considerations” and not because of US arm twisting, and, secondly, because the Indian refineries only are deciding on the oil imports from Iran — meaning it is not a government decision as such.
Of course, only a total duffer will fall for the sophistry. Our government is lying through its teeth. How come the government-owned refineries have suddenly developed cold feet toward Iranian oil but not privately-owned Essar Refinery?
Clearly, government has meekly succumbed to Washington’s diktat. Which is of course pitiable, but not surprising. All the same, curiously, the government is also leveraging the US arm twisting to its advantage. For one thing, it expects Washington not to impose sanctions against India in July for purchasing oil from Iran.
Besides, the US Congress, where the Israeli lobby is active, has been placated. Hopefully, India will get some benefit out of this ‘goodwill’ at the forthcoming Strategic Dialogue in Washington? Say, a permanent seat at the UN Security Council? Or, at the very least, a membership of the Nuclear Supply Group?
India has done well to take advantage of Iran’s woes. Forty-five percent of oil purchase from Iran will now be as barter trade. India manipulated the crisis in the payment mechanism (precipitated by the US, of course) to bring in the formula that since money can’t change hands between India and Iran, why not switch to barter arrangement?
So, India will sell tea and basmati rice and so on for half of Iran’s ‘sweet oil’. Isn’t that splendid? Besides, Iran also now needs to mandatorily buy from India products valued up to 45% of the income out of its oil exports to India. Isn’t that an ingenuous export promotion drive for India? Would Saudi Arabia or Qatar agree to such a deal — sell their oil and gas for India’s attar or aphrodisiacs? I wonder if our political elites who mollycoddle the wealthy Gulf sheikhs to their personal benefit could swing such a deal for India.
And, what does Iran get in return for this lop-sided deal? Nothing very much. Except, an Indian official or two may say now and then that Iran has the right to pursue its nuclear programme as an NPT member and that Iran nuclear issue should be resolved peacefully through negotiations.
To my mind, Indian diplomacy has never showed such ruthless efficiency in leveraging a regional conflict situation to its advantage. I am waiting to see what happens if and when the US and Iran decide to kiss and make up sometime during Barack Obama’s second stint in the Oval Office. Hopefully, India will have become a permanent member of the UN Security Council by then?

Posted in Diplomacy, Politics.

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13 Responses

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  1. I wont dance dont ask me says

    Iran is one country which has no national debt. Well, India has tonnes, USA has mega tonnes of it!
    Its obviously true Robinhoods have better leverage over the Kings. You must be dumb to deny that!

  2. Debasish Sarkar says

    The External policy of Current Indian Administration, Seems to me like marauding head less Chicken. The MEA headed by Mr, Krishna, we know as most inefficient minister. This ministry, when ever it engages to deal with foreign country, always bring floppy results [one example- recent fiasco with Norway to bring back estranged Kids to their Parents in Calcutta.
    While dealing with Pakistan and Iran, India always sends wrong message to America and Western countries. As a result we have lost their trust.
    NB- India must desist from supporting Iran and Pakistan, Politically and Economically.

  3. Anonymous says

    USA is running its capitalist empire. They just dont care about economy of other part of world. They have weapon industry which is hugely profitable. To run the weapon industry they always create war like conditions around the world. They talk about people and democracy and sell weopons all over the world which has nothing to do with general peoples wellfare.

  4. shilpy says

    i don’t really see what the big deal here is in terms of over all trade balance. tea and basmati rice have been india’s traditional exports to iran and gulf countries any way. the barter exchange is done at market prices of india’s commodities against iran’s oil commodity at oil market price. if usa finds alternatives for india in energy supply, that would still be at market prices. nothing in the equation helps indian economy. but i tell you where usa falls short on its vision. hillary should have gone to gujarat to congratulate narendra modi on the gigantic solar power project modi’s govt has ushered in. this could open up a new wonderful market for struggling american solar energy companies like the “first solar” company (whose stocks are way down now). but we don’t expect hillary or anybody else in usa to show such extraordinary vision, do we?

  5. Michael Miles says

    Good analysis, but agree with Mr. Kulkarni that the notion of a permanent seat is fanciful, as Corporate thinking only allows those positions of power to countries that control the fate of the “founding” countries in their hands; holding a trillion dollars in US debt, perhaps, or perhaps the center of international banking?

  6. Indian Rishi says

    American can not ruin any country economically. PAK got into this situation because it got habituated to free meal.

    As long as our products and services are good and cheap, we can compete. There are some people who always oppose for the sake of opposing. We can not compete by just giving birth more.

    If America does some thing good for their citizens, we should not cry. Rather our politicos should protect our interests.

  7. Ramesh says

    How about a new Security doctrine?
    For each living Indian
    Access to drinking water
    And a clean latrine.

  8. NIT DIESEL says

    Your essay implicitly shows that diplomacy and commerce are inter twined which was earlier the case with western countries and India is also now following.The Indian foreign ministry has matured a lot in the recent past and results should only be better in future .

  9. Ibne Ashfaque says

    This is a matter of fact analysis. It is good to see the world’s biggest democracy kneeling down to the American cowboy. The farce that Western Democracy is. I am very optimistic that India will get a seat at the UN security council. However, there is no free lunch. In the last sixty years the elite of all America’s allies whether they were in Pakistan, Chile or even Iran had a great time for quite sometime while the people got screwed up in misery and atrocity. Just ask the ordinary citizens of Pakistan, Chile and Iran how they were whacked economically, socially and politically by the so called free-market policy promulgated by the American government. The party for the elites also in countries friendly to the Americans eventually turns into a nightmare ask the Shah’s family, General Pinochets junta and these days Pakistani Generals are in the soup. My heart goes out for the citizens of India whose time has come as the Vulture (America) has landed in your courtyard. The Indian elite led by corporate entities will have a great time in the short run before eventually events will overtake them.

  10. sudip majumder says

    Very well said. With the bright strong cerebral persona like SM Krishna doning the MEA along with think tank like Nirupama Rao, Ronen Sen – Diplomacy became a bit more professional. Gone are the days when the diplomacy is cuddled by some born-rich people

  11. says

    Why does this article give an indication that this was written by ‘left leaning’ person? You fail to see that US govt. bent backwards to accomodate India’s concerns on 26/11, Hafiz Saeed. Which country went out of way to get India Nuclear deal which Pakistan still envies! US has been calling India its ‘strategic ally’ since last few years..even before this Iranian sanctions came into force. What did India gets from left ideology anyways? Strikes, unions, poverty – a glaring example is under-developed West Bengal.

  12. aslam hunani says

    Excellent move, first time the UPA government is doing something which is praiseworthy….

  13. Srihari Kulkarni says

    I think a permanent seat in Security Council is still far fetched and merely reducing oil imports from Iran is not good enough to secure US’ favour. Of course, there are other members like China and France who still do not favour an expansion.

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