India-Iran trade bid sets example
to West By Vijay Prashad.
A delegation of 70 Indian traders, led by
the president of the Federation of Indian Export
Organisation (FIEO), Rafeeque Ahmed, are due to
leave Tehran today after a six-day visit to Iran
during which the Indian government did not release
the names of those firms that joined the
delegation. The businesses feared retaliation from
the United States and European Union.
A
member of the delegation estimates that several
deals had already been cut at the time of this
article. The Secretary General of Tehran's Chamber
of Commerce, Mohammed Mehdi Rasekh, said that Iran
wanted to take advantage of India's "capabilities
in the fields of food industry, medicine, metals
and machinery and car parts". In return, apart
from oil exports, Iran could provide India
with plastic materials,
polymers and chemicals.
FIEO's Ahmed spoke
to Iranian businessmen in Tehran about the broader
political implications of their trip. "New Delhi
is seeking to increase its exports to Iran and
sees the increase in trade as a sign of deepening
relations. New Delhi gives ample importance to
boosting ties with Tehran."
To underscore
this message, the joint secretary of the Indian
Commerce Ministry, Arvind Mehta, said India-Iran
trade should rise to $25 billion by 2015 from the
current figure of $15 billion.
On March
13, India's Ambassador to Iran, Serio Stava, told
the visiting Indian traders in a public meeting in
Tabriz, "Expansion of cooperation with Iran due to
this country's economic and geographical
conditions is among the priorities of India's
foreign trade." The delegation had met with the
Tehran Chamber of Commerce before coming to Tabriz
en route to Isfahan.
Increased commercial
ties between India and Iran are precisely what the
United States does not want to see. In early
March, US Secretary of State Hillary Clinton told
a congressional hearing that the US remains
concerned about India's links with Iran. However,
she said, the Indians "are heading in the right
direction. In fact, I think in a number of
instances, the actions of countries and their
banks are better than the public statements that
we sometimes hear them making."
It is
certainly the case that both India and China have
sought to increase oil imports from Saudi Arabia.
But it is not fully clear if this new oil is to
substitute for their reliance upon Iran or in
response to the increasing oil needs of both Asian
countries. Clinton told congress that the US is
having "very intense and very blunt" conversations
with China, India and Turkey about reducing their
dependence on Iranian oil. Even if India has
indicated a desire to cut back on Iranian oil, the
move by the Indian Commerce Ministry and FIEO to
increase trade in other goods compromises the US
strategy.
On February 11, the American
Jewish Committee (AJC), the leading edge in the
Israel Lobby in the US, sent a letter to the
Indian Ambassador in Washington, Nirupama Rao. The
letter pointed to the relationship between India
and Israel since the 1990s, and to the Israel
Lobby's role as an "advocate of increasingly close
cooperation between Washington and New Delhi."
Since 1992, India and Israel have created
a close relationship, with India now the leading
arms importer from Israel. [1] Israel functioned
as an important doorway to the close alliance
between Washington and New Delhi, but apart from
the arms deals, it has not been an important
economic partner.
India's trade with
Israel is no more than $5 billion per year, a
third of the current figure for its trade with
Iran. The AJC identified precisely what Clinton
was not willing to talk about, the intensified
commercial ties between India and Iran,
"We were particularly struck by the
announcement this week, by Commerce Secretary
Rahul Khullar, that 'a huge delegation' of Indian
business representatives would soon travel to Iran
to capitalize on opportunities created by European
withdrawal from the Iranian market. This suggests
that New Delhi is attempting to take advantage of
sanctions adopted by like-minded nations for the
explicit purpose of preventing nuclear
proliferation by a dangerously aggressive regime -
and which could, in turn, trigger an escalating
arms race - in a highly volatile region."
The Indian Lobby in Washington, DC, of
which US India Political Action Committee is one
tentacle, tried to explain away a tense problem.
In USINPAC's March newsletter, Kabita Sonowal
tried to manage the tension between the US, India
and Israel. "India's diplomatic position seems to
be precarious like that of a cat treading on a hot
tin roof."
USINPAC (whose history I have
laid out in my forthcoming book Uncle
Swami), [2] is eager to defend India, but to
do so without ruffling the feathers of the US or
Israel. India, Sonowal writes, is "literally being
coerced into choosing between Iran and the US".
This is precisely the situation.
The
spokesperson at the Indian Embassy, Virander Paul,
released a stiffly worded statement on March 6 in
response to the AJC letter. The statement did not
mention the AJC, but it caviled at "recent media
reports" that "presented a distorted picture".
It did not say what those distortions
were, nor did it lay out the logic of the trade
deals. What Paul did say was significant on two
fronts. He noted that Iran has the "right to
peaceful use of nuclear energy" as long as it
fulfilled its treaty obligations to the
International Atomic Energy Agency. This is
against the grain of the US position, which seeks
to block Iran from enrichment of uranium
regardless of its uses or intentions.
The
second point that Paul made was that India "firmly
believes that the situation concerning Iran should
not be allowed to escalate into a conflict, the
disastrous consequences of which will be in
nobody's interest". This point goes against the
tenor of the war-talk from Tel Aviv, and in the US
from the Republican Party and from sections of the
Democratic Party (where the use of the phrase "all
available options are on the table" only has
military implications).
On Tuesday, March
13, as the Indian traders begin to wrap up their
talks in Tehran, the major oil producers are
meeting their consumers in Kuwait City. Early
indications suggest that the producers are not
comfortable with the rise in crude oil prices,
since this might curtail the world economic
recovery and create a political backlash against
them.
Saudi Arabia's oil ministry has put
out feelers about the oil price rise, indicating
that it is worried about anything edging toward
$130 a barrel. A Saudi official told the Wall
Street Journal that Saudi Arabia can pump an
excess two million barrels a day to make up for
shortfalls from Iran as a result of the sanctions,
but "We don't want to replace Iranian oil, and we
never said we wanted to. We will step in and fill
any gap in the market if needed."
This is
not an endorsement of the embargo regime that the
US and the European Union wish to set up. The same
official noted that the Saudis do not want "to get
involved in the politics behind the sanctions".
Such a view was echoed by Saudi Oil Minister Ali
al-Naimi who also said that Saudi Arabia does not
want to replace Iranian oil from the world market,
or to disrupt the operations of the Organization
of the Petroleum Exporting Countries.
As
the Indian traders pack their bags and the Saudis
and Kuwaitis discuss oil prices, it appears as if
the embargo regime is a non-starter. It appears as
well that the Barack Obama administration is
unenthusiastic about a bombing raid on Iran. This
means that there are few options for the West. The
only road ahead is negotiations, but this is
fraught with all kinds of myopic positions, mainly
having to do with a demonstration by the Iranians
that they do not have a nuclear weapons program.
This is not forthcoming, since it would
relieve Tehran of any bargaining points for
negotiation. It might be a better idea for the
West to enter negotiations without any
preconditions. The US and the EU might want to
follow the lead of the Indian traders, visit
Tehran and seek normal relations upon which to
build trust and security.
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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