India dumps Iran, squeezes
Obama By M K Bhadrakumar
The cloud cover of sophistry that has been
characteristic of India's Iran policy in recent
years lifted on Tuesday when the government
admitted in parliament that it had taken a policy
decision to reduce oil imports from Iran.
The frank admission came on a day when an
emissary from Washington, Carlos Pascual, special
envoy on energy matters in the United States State
Department, arrived with the proclaimed intention
of weaning New Delhi away from Tehran's fuel.
The Barack Obama administration will be
delighted that the sustained diplomatic and
political pressure on India is finally bearing
fruit. Tehran, on the other hand, will view this
as the unkindest cut of all the blows that New
Delhi has inflicted on it
over the past five year.
Meanwhile, a protagonist lurking in the shade is
all excited - Saudi Arabia.
A mystery
lingers. What did the Obama administration promise
the Manmohan Singh government as quid pro
quo? Manmohan most certainly sensitized US
Secretary of State Hillary Clinton of India's
"wish list" during her recent hurried visit to
hold consultations personally with him just ahead
of the US-India Strategic Dialogue co-chaired by
her, which is scheduled to convene in Washington.
Not as routine as it may seem
Delhi has been under immense pressure from
Washington to fall in line with the letter and
spirit of the US's sanctions on Iran over its
nuclear program and curtail the sourcing of crude
oil from Iran. The Indian government's official
stance so far has been - and continues to be -
that it is only bound by United Nations-backed
sanctions.
Beneath the veneer of a
principled position, however, India has been
quietly and steadily backtracking. The frank
admission on Tuesday came from Junior Minister for
Petroleum R P N Singh, who disclosed, "Total crude
oil imported from Iran by Indian companies during
2010-11 and 2011-12 is 18.50 million tonnes and
17.44 million tonnes, respectively. The target
fixed for import of crude oil from Iran for
2012-13 is about 15.5 million tonnes."
He
made it look routine, but the cold statistics
reveal that in the current fiscal year, India will
be cutting its oil imports from Iran by 11%. The
Indian bureaucracy is never at a loss for words
and Singh added, "To reduce its dependence on any
particular region of the world, India has been
consciously trying to diversify its sources of
crude oil imports to strengthen the country's
energy security."
This is a considered
policy decision backed by a detailed strategy
paper based on a political directive to harmonize
the policy on India's petroleum imports with
Washington's Iran sanctions. No doubt, it is a
major political decision, considering that India
currently imports 80% of its crude oil from over
30 countries and relies on Iran for 12% of these
imports.
Curiously, a huge "collateral"
beneficiary is going to be the influential Indian
corporate house Reliance. Pascual brought a
proposal offering that Shale Gas in liquefied form
could be supplied from the US to replace Iranian
oil. Reliance holds a monopoly on Shale Gas
technology in India and has invested heavily in
the US Shale Gas industry.
The US proposal
is based on a perfect matching of Obama's
political need to isolate Iran with India's energy
security and Reliance's potentially massive
business opportunity. The ingenuity of the
American proposal is such that the Manmohan
government cannot easily ignore it.
Meanwhile, a short-term beneficiary is
also going to be Saudi Arabia, from where India
hopes to make up the current shortfall in oil
imports from Iran.
Riyadh derives
satisfaction that India's traditional ties with
Iran are in the doldrums and that India's recent
"gravitation" toward the Gulf Cooperation Council
(GCC) pole in the geopolitics of the Persian Gulf
gets reinforced. There are fallouts in India's
domestic politics, too, where Saudi Arabia and the
other Muslim Gulf monarchies exert a
larger-than-life influence by lavishly patronizing
the Sunni Muslim lobbies that have a nexus with
various political parties.
But Saudi
influence in India today exceeds the Sunni Muslim
constituency. The Saudis have successfully
emulated the pattern of US and Israeli diplomacy
in New Delhi by casting their net wide in the
strategic community. Indian pundits have begun
arguing for the GCC side of the story in the
geopolitics of the Persian Gulf. There has been a
steady stream of the "Gulf Arab" leaderships
visiting New Delhi - the latest being the colorful
emir of Qatar. India attended the first
session of the "Friends of Syria" grouping in
Tunis.
Tehran will be unhappy that
Manmohan has once again caved in to US pressure to
roll back ties with Iran. Simply put, India has
become adept at using the "Iran card" to leverage
advantages out of the US. New Delhi has entrapped
Tehran in a ring of pragmatic engagement, which
falls far short of Indian promises or Iranian
expectations, but Iran is left with the
predicament to settle for the kind of relationship
India chooses.
Superb timing
India is shrewdly exploiting Iran's
current vulnerabilities. Thus, by taking advantage
of the obstacles being put by the US on the Asian
Clearing Union payment mechanism of India-Iran
trade, New Delhi persuaded Tehran to accept a
system of barter trade for up to 45% of its oil
exports, which would effectively work as an export
promotion drive for Indian companies in the
Iranian market.
Iran accepted the deal
grudgingly since it is keen to continue somehow or
other with its longstanding relationship on oil
with India through the present difficult corridor
of time. The heart of the matter is, remove oil
from the Iran-India relationship and it will
atrophy to virtually nothing. Evidently, New Delhi
has assessed that the relationship means more to
Iran than to India at the moment.
Iranian
President Mahmud Ahmadinejad telephoned Manmohan
on Monday in an attempt to shore up the
relationship. He stressed that Tehran sets no
limits to the broadening of ties with India and
that the traditional, historical relationship has
been of a "brotherly" character and is assured of
a "promising future". Manmohan responded with a
caveat that India attaches importance to ties with
Iran and welcomes a broadening of relations with
Iran "on the basis of national interests".
There is some evidence that Tehran is also
settling for a low-key relationship. Tehran
parried repeated Indian attempts to schedule a
visit by the secretary general of Iran's Supreme
National Security Council, Saeed Jalili, to New
Delhi. Tehran estimates that the consultations are
best scheduled when New Delhi is genuinely open to
strategic engagement with Iran.
Having
said that, the big question still remains: What is
it that India hopes to extract from the Obama
administration in return for its momentous
decision to comply with the US's Iran sanctions?
Indian diplomacy is hard at work. Starting
from 2006 when India began voting against Iran in
the International Atomic Energy Agency, Iran has
become a factor in the US-India strategic
partnership and New Delhi has been able to
leverage it because Washington is extremely
sensitive to Iran's regional standing.
Manmohan's timing is superb. Although
Obama needs to take a decision on giving a
"waiver" to India under the Iran sanctions regime
only in July, Manmohan took the decision now to
cut India's oil imports from Iran.
Clearly, New Delhi has set its sights on
the forthcoming US-India Strategic Dialogue in
early June. After having discussed with Clinton
during her recent visit the future directions of
the US-India strategic partnership, New Delhi
expects a tradeoff.
Obama's political
prestige is at stake over the Iran nuclear issue,
especially in a tricky presidential election year
for him. Manmohan is handing over to him a major
foreign policy "achievement" in making Tehran look
somewhat more isolated in its region just when the
talks over the Iran nuclear issue are moving into
a crucial phase.
If Indian diplomats are
worth their salt, they are tiptoeing toward the
US-India Strategic Dialogue with a killer
instinct; they won't settle for some two-penny
worth gains.
Ambassador M K
Bhadrakumar was a career diplomat in the
Indian Foreign Service. His assignments included
the Soviet Union, South Korea, Sri Lanka, Germany,
Afghanistan, Pakistan, Uzbekistan, Kuwait and
Turkey.
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