India dumps Iran, squeezes Obama

Discussion in 'Subcontinent & Central Asia' started by ejazr, May 17, 2012.

  1. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    Asia Times Online :: 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.
     
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  3. Adux

    Adux Senior Member Senior Member

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    Why are we posting MK Bhadrakumar's tripe here, if he had his way, he would dismantled the Indian union, and given away the rights to China, and NO I am not exaggerating.
     
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  4. utubekhiladi

    utubekhiladi The Preacher Elite Member

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    there is no such news from indian media. something is not right,
     
  5. Adux

    Adux Senior Member Senior Member

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    Something is not right, that is MK Badhrakumar, I expect people reading and participating in forums especially Indian, to know his tripe quite well.
     
  6. warriorextreme

    warriorextreme Senior Member Senior Member

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    Mr.Bhadrakumar at it again...
     
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  7. sob

    sob Moderator Moderator

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    Whatever be the past record of Mr.Bhadrakumar that is not the issue here.

    It seems he has read the tea leaves correctly this time. There is something afoot here in the Indo US relations which has been very clearly listed by the writer above

     
    asianobserve and KS like this.
  8. sob

    sob Moderator Moderator

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    I have been writing here for some time that India does not need Iran as much as Iran needs India. Iranian economy is in a mess and they do not have enough money to even keep regular maintenance of their oil fields. Much needed money is being diverted to the nuclear programme.

    All said putting all our eggs in the American basket is also not in our interest. We should continue to engage with Iran because ultimately we need them to keep Afghanistan out of the grasp of Pakistan.
     
  9. ajtr

    ajtr Veteran Member Veteran Member

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    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.
     
  10. sukhish

    sukhish Senior Member Senior Member

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    India will make up with Iran at some point. it is keeping the relationship low key that's all. India wants NSG membership and UN permanent seat at all cost.
    Also iran is not going anywhere it is here to stay. U.S can prepared to strike iran, but will never strike iran. this game will continue. India is playing right.
     
  11. Yusuf

    Yusuf GUARDIAN Administrator

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    Dumping a friend when he needs you and in fact acting against it because it suits you and you still think he will understand you
     
  12. KS

    KS Bye bye DFI Veteran Member

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    Hope it's true.


    Well it may sound a cliche`...but there are no friends in diplomacy...

    I will take a NSG+MTCR seat by reducing some trade with Iran any day.
     
  13. Yusuf

    Yusuf GUARDIAN Administrator

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    Have a look at the NSG thread.

    There is more to Iran than just oil.
     
    Mad Indian likes this.
  14. asianobserve

    asianobserve Elite Member Elite Member

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    I think that friend will understand, especially so that he knows that you know he's prepared to violate your sovereignty if it suits him, like blowing up a diplomatic car in the middle of Delhi...
     
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  15. pankaj nema

    pankaj nema Senior Member Senior Member

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    Iran is a friend NO doubt but it is HELL bent on suicide

    So what can India do ?

    US / EU/ Israel who are all involved heavily in this looming conflict with Iran
    on Iran's Nuclear issue ; are also our friends

    For One friend should we give up all our other friendships
     
  16. KS

    KS Bye bye DFI Veteran Member

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    Yeah the whole access to central Asia thing.

    That is why I said "reducing some trade" and not "stopping the trade".

    Also when Iranis are hell bent on shooting themselves in the foot what can India do..
     
  17. thakur_ritesh

    thakur_ritesh Administrator Administrator

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    Yusuf,

    Every country has cut down on the sourcing of oil from Iran, it is not just us who are doing it, so we are definitely not the only ones.

    Take China, which if I am not wrong, has made cuts to the tune of 15-20% compared to our 11%. As I have said earlier, India and the US have reached the requisite understanding on Iran and we are being allowed to have our way on Iran compared to others and are doing better than even Japan, RoK and Turkey on the matter, though it is another thing that the public discourse might not have been in sync till now, but check the timing of Indian announcement, it comes a month before the review that will happen on who needs to be sanctioned and not, also we do need to give some leeway to Obama during this crucial presidential election year.

    As far as Mr Bhadrakumar's article is concerned, we all know he has his set of views, so the heading and if one reads the article then what he has written, a lot of it is nothing new and there has been a selective attempt at highlighting things, but then that is how he has been, and we should know that by now.

    Indo-US relations after a good one year are again back on track, which is what is good.
     
  18. Yusuf

    Yusuf GUARDIAN Administrator

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    TR, China can compensate its reduction in oil supply with other things. It may give weapons for free/discounted price, give long credit etc. India does not have that kind of leverage. We faced the balance of payment issue with them for the same reason. We stand to loose out on our investment in the Chhanar port as well. Need to further understand what kind of arrangement has been set up as we already have info about Iran being a transit route for NATO on the sly.
     
  19. asianobserve

    asianobserve Elite Member Elite Member

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    (irrelevant)
     
    Last edited: May 18, 2012
  20. Oracle

    Oracle New Member

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    If you have to move around with the big players, you gotta pull yourself up or leave the not so important ones. That's the way it has been and that's the way it would be.
     
  21. ejazr

    ejazr Stars and Ambassadors Stars and Ambassadors

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    BharadKumar has 30 years of diplomatic experience particularly in the West Asia and Eurasia region. Even if we don't agree with his views, IMO its worth debating on.

    There is no doubt that after the high of Indo-Iranian ties under the NDA with the 2003 defence agreement, there has been a chill. Under UPAI we had the IAEA votes and now with the more stringent (and overblown IMO) nuclear issue, India has to make a choice again on downgrading Iranian ties further.

    Again, this doesn't mean that India will cut off ties, but that it will downgrade it. As I have mentioned before, India is under pressure not only from the US on Iran, but also backdoor pressure from Israel as well as the GCC countries. If it was just US or Israel or just the GCC countries, India might have been able to take a more lenient view. But with a combined US-GCC-Israel pressure on India to downgrade ties on Iran, it makes it more difficult for India.

    That leads to the alternative, if India does not want to just be passive and negotiate from the US/Israel/GCC bloc on what it should get in return from downgrading, there is no other option than to actively involve itself in negotiating an outcome. Ajai Shukla mentioned how its time for India to start exercising its muscle and IMO, the MEA should look at the right time, possibly end of this year or early next year to move in and hammer out a deal that would give a negotiated outcome.
    This would increase Indian influence in the region and given that all stakeholders have good ties with India, it would stregthen Indian position with them as well.
     
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