India faces a grave dilemma. It is the
fourth-largest consumer of imported oil, and as a
growing economy wedded to the carbon civilization,
it needs to burn vast amounts of oil to maintain
its growth rate.
The oil comes from a
variety of sources, but mainly from the Gulf. The
top five exporters of crude oil to India in 2011
in order of
quantity were Saudi Arabia,
Iran, Iraq, Nigeria and the United Arab Emirates.
About 10% of India's imports of oil come from
Iran.
Contradictory political pressures
have put India's government in a serious bind.
As Subordinate ally to the United
States In the early 2000s, the United
States wished to sequester India's respectable
position within the Global South for its own
parochial interests regarding Iran.
Knowing full well that it is energy
dependent, India had begun to consider methods of
bringing natural gas in from Iran's South Pars
fields into Gujarat. Natural gas would be a
sensible substitute for crude oil. There were two
methods to draw the gas into the country. The
first was to convert it into liquefied natural gas
(LNG) and ship it to India. But this is an
expensive proposition. The second was to run a
pipeline from southern Iran through Pakistan into
India. This Peace Pipeline would not only be a
major boost for India's energy needs, but it would
help create a material incentive for peace
initiatives in South Asia.
To break the
India-Iran ties, the George W Bush administration
offered India a simple deal. It would remove
sanctions against India that had come into place
after India's nuclear tests of 1998. Unable to
import certain technologies, India was eager to
have these sanctions mitigated or withdrawn.
In exchange, the US would provide India
with access to nuclear material from the Nuclear
Suppliers Group, and so effectively recognize
India as a nuclear power. This was despite the
fact that the Indian government's own studies
showed that nuclear power at best would only
provide for 5% of India's energy needs and so not
be a substitute for oil or natural gas.
In
return, India would have to vote with the US
against Iran in the International Atomic Energy
Agency (IAEA).
India's bourgeois political
parties went for the deal. In September 2005,
India voted to find Iran in "non-compliance" with
the safeguard obligations of the nuclear
Non-Proliferation Treaty (NPT). What is remarkable
here is that India is not a signatory to the NPT,
yet it was able to judge Iran's actions based on
it. This vote paved the way to move the Iranian
case to the UN Security Council.
India
voted in the IAEA once more in February 2006 to
send the Iranian case to the Security Council. In
December 2006, the US Congress ratified the
US-India Peaceful Atomic Energy Cooperation Act.
Its "Statement of Policy" noted pointedly that
India was "to dissuade, isolate, and if necessary,
sanction and contain Iran for its efforts to
acquire weapons of mass destruction, including a
nuclear weapons capability and the capability to
enrich uranium or reprocess nuclear fuel and to
the means to deliver weapons of mass destruction."
India yoked itself to the US agenda
vis-a-vis Iran.
As partner with the
Arab NATO and its silent ally India is the
second-largest trading partner of the Gulf
Cooperation Council (GCC) countries. The GCC, the
"Arab NATO", was formed in 1981 as a shield
against Iran. It has a long antipathy to Iranian
assertion in the region, and considers Iran to be
its principle adversary (rather than Israel, for
instance). Saudi Arabia is the primus inter
pares of the GCC. It is the largest seller of
crude oil to India (the GCC countries supply India
with 45% of its crude oil needs). In 2006, the
Indian and the Saudis signed a major deal. [1]
While in India, King Abdullah and Indian Prime
Minister Manmohan Singh urged Tehran to "remove
regional and international doubts about its
nuclear weapons program."
The silent ally
of the Arab NATO is Israel. Regardless of its open
declarations of support for the Palestinians, the
GCC is reluctant to do anything to ruffle the
feathers of Tel Aviv, which would of course
irritate the GCC's main partner, the United
States. This opened the door for a strengthening
of the India-Israel ties that germinated up in the
1990s and have flourished in the past few years.
India now imports over US$5 billion of Israeli
arms, making India its largest arms customer. [2]
As leading figure in the BRICS
formation Since 2003, India has been a
central player in the creation of a new
international formation of the "locomotives of the
South": first as India-Brazil-South Africa (IBSA,
2003) and then as Brazil-Russia-India-China-South
Africa (BRICS, 2009). The BRICS bloc is a serious
challenge to Atlantic hegemony, mainly on the
economic plane but increasingly in the political
domain as well. On Libya, the BRICS countries
articulated a common platform but their challenge
fell apart at UN Resolution 1973 (when South
Africa voted for the resolution on the urging of
President Obama). On Syria, Russia and China
exercised their Security Council veto while the
others voted for the resolution. Political unity
is not yet on the cards. This is a major
limitation of the BRICS platform.
On Iran,
the BRICS are more cautious. There is no appetite
for war, or even for a limited military strike.
There is even less appreciation for the sanctions
regime set up by the Atlantic powers. These
economic sanctions do not run through the UN,
which means they are not legally binding. The US
has been trying to force those who trade with Iran
to stop doing so on pain of being sanctioned by
the US in turn. It is hard for the US to muscle
the Chinese, who have the upper hand as far as
economic transactions are concerned. US Treasury
Secretary Timothy Geithner rushed off in
mid-January to Beijing and Tokyo, eager to get
these East Asian states to honor the punitive US
sanctions regime. China is plainly not interested.
It supports the UN resolutions against Iran, but
refuses to adhere to the much more rigorous
European and US sanctions regime. China buys a
fifth of Iran's oil. It cannot afford to isolate
the country. Nor can India and Japan. For them,
their energy needs trump the parochial political
imperatives of the Atlantic powers and the GCC.
When the US and the EU announced their new
sanctions regime, the BRICS states took umbrage.
The Chinese have already increased their purchases
of African oil. India and China considered paying
for the Iranian oil via gold rather than dollars.
The Indians buy their oil via the Turkish bank,
Halkbank, whose manager, Suleyman Aslan, pledged
to continue its work with its customers. After
hasty negotiations, the Indians and the Iranians
agreed on February 7 to trade oil for a payment
mechanism that includes Indian rupees (for 45% of
the crude) and other methods for the remainder.
Iran's banks will open accounts in India to settle
payments. This might be a way around the US
sanctions that now target Iran's central bank.
India's Finance Minister Pranab Mukherjee was
uncharacteristically bold in late January, "We
will not decrease imports from Iran. Iran is an
important country for India despite US and
European sanctions on Iran."
India is in a
political bind. Its ruling class favors a close
assignation with the United States, but this is
not a practical alliance. The US demands far too
much, including the subordination of India's own
interests to the US agenda. Close relations with
China are imperative, as is the creation of a
healthy foundation of communication in South Asia
with Pakistan and Iran to build trust not only for
these countries but also for Afghanistan, which is
too often at the mercy of Indian, Iranian and
Pakistani games.
Currently, the economic
needs of China and India will trump any attempt to
fully strangle Iran's economy. The attack on the
rial has already had catastrophic effects for
inflation inside Iran. But if oil exports cease,
it will bring Iran's economy to a stop. India is
not acting here out of the principles of
non-alignment or for the creation of a South-led
alternative to the Atlantic bloc. Nonetheless,
India's objective interest is a sufficient spur to
timidly cross swords with the parochial interests
of the Atlantic powers, who seem to want to gallop
to war with Iran.
Pressure on India is on,
and so are the inducements to substitute Iranian
oil with oil from Iraq and Libya. India's
ambassador to the United States, Nirupama Rao, has
been suggesting that Iranian exports to India have
decreased over the past two years. This would mean
that India might be open to a new entente, not to
depart from the nuclear shadows this time but to
be liberated by the United States from its oil
dependence on Iran. This is not propitious for the
consolidation of a BRICS bloc.
Vijay Prashad is
Professor and Director of International Studies at
Trinity College, Hartford, United States. This
spring he will publish two books: Arab Spring,
Libyan Winter (AK Press) and Uncle Swami:
South Asians in America Today (New Press). He
is the author of Darker Nations: A People's
History of the Third World (New Press), which
won the 2009 Muzaffar Ahmed Book Prize.
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