India ignores US call for economic freeze, opens up Iran oil strategy

ejazr

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With China and Japan defending oil trade, the pressure should come down on India

Chinese premier defends oil trade with Iran | World news | guardian.co.uk
Chinese premier Wen Jiabao has defended his country's extensive oil trade with Iran against pressure from the west to impose sanctions, and yet has also warned Tehran against any effort to acquire nuclear weapons.

Wen spoke on Wednesday at the end of a six-day visit to the Middle East, against a backdrop of tensions over possible US sanctions on countries that do energy trade with Iran, which the west says is focused on developing nuclear weapons.

Iran has insisted its nuclear goals are peaceful, and in late December threatened to punish the latest western sanctions by limiting the flow of oil through the Strait of Hormuz, a vital route for much of the Middle East's oil exports.

"China adamantly opposes Iran developing and possessing nuclear weapons," said Wen, and he warned against potential confrontation in the Strait of Hormuz. Beijing is usually much more measured when describing Iran's nuclear ambitions.

Speaking at a news conference in Doha, Wen also took aim at both potential threats to China's oil imports: the US sanctions pressure and the Hormuz tensions.

"I also want to clearly point out that China's oil trade with Iran is normal trade activity," he said in response to a question about US and European efforts to curtail Iranian oil exports and revenues, according to a transcript on the Chinese foreign ministry's website.
 

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ejazr

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The Coming U.S.-India Train Wreck | The Diplomat

Differences over Iran threaten to undermine the progress made on U.S. relations with India. Can New Delhi be persuaded to apply more pressure on Tehran?

Iran is the crisis of the hour in Washington, and for the first time in recent memory talk now routinely turns to military action. In an effort to forestall Tehran's pursuit of a nuclear weapon, the United States has launched a worldwide effort to limit Iran's oil exports and increase the economic stress on the Iranian regime. Where sanctions on Iran were once seem as a somewhat quixotic American campaign, they are about to go worldwide; the United States will soon sanction firms that do business with Iran's Central Bank, which now processes a large percentage of oil transactions. The European Union, meanwhile, is poised to embargo Iranian oil and Asian countries, including South Korea and Japan, are enlisting in the effort to economically isolate Iran.

As this effort proceeds, Americans will inevitably look to India, the fourth-largest importer of Iranian oil. But they will see a view of Iran that looks very different in New Delhi than it does in Washington. This difference over Iran poses a genuine problem to the two countries and, unless it's bridged, it could throw a tremendous spanner into the machinery of U.S.-India relations.

It's difficult to overestimate the importance of the Iranian nuclear threat in the minds of most American policymakers. They see in Tehran a regime that pursues an atomic weapon capacity at the same time that has aided American enemies in Iraq and Afghanistan, supports Hizbollah, Hamas and the thuggish regime in Syria, allegedly tries to assassinate the Saudi ambassador to the United States, and threatens to close the Strait of Hormuz, all while denying the Holocaust and threatening death to America. An Iranian nuclear weapons capacity, many policymakers fear, could hand Tehran a deterrent behind which to pursue an even more aggressive drive for regional domination, set off a regional arms race, and threaten the stability of the Middle East.

In New Delhi, the picture looks very different. India imports roughly 12 percent of its oil from Iran, and because Pakistan blocks Indian commerce through Afghanistan to Central Asia, Iran forms a key transit Indian transit route. Indian Shia comprise a relatively small percentage of the population, but represent an important swing vote in elections. India and Iran have long cultural and population ties, and in 2006, Prime Minister Manmohan Singh went so far as tell an American interviewer that, "Our relations with Iran, we cherish a great deal."

Yet this has begun to change around the edges. The talk of cherishing ties has faded, and India has begun increasing its purchases of Saudi oil. Singh has said explicitly that India opposes an Iranian nuclear weapon, and New Delhi voted to censure Iran at the International Atomic Energy Agency.

Still, the new U.S.-led sanctions push may put Washington and New Delhi on opposite sides of this critical issue. Asked about America's new sanctions, Indian Foreign Secretary Ranjan Mathai said this past week: "We have accepted sanctions which are made by the United Nations. Other sanctions do not apply to individual countries. We don't accept that position." Indeed, he went further, noting that an Indian delegation would travel to Iran to "work out a mechanism for uninterrupted purchase of oil from Iran." And India and Iran have reportedly agreed to settle some of their oil trade in rupees to avoid restrictions on dollar-denominated trade.

Thus far, Washington and New Delhi have chosen to emphasize the areas of agreement – the IAEA votes, their shared opposition to an Iranian nuclear weapon – and downplay the disagreement on how to achieve that objective. But with the issue heating up in Washington and other world capitals, and with the new U.S. sanctions poised to go into effect, there's the danger of a real impasse. Members of the U.S. Congress will be dismayed if India appears to stand outside a concerted international effort to press Iran at a critical inflection point. Members of the Indian parliament, for their part, will not particularly appreciate being publicly goaded to get tough on Iran.

The collateral damage could be the U.S.-India relationship. A falling out over Iran could infect other elements of the budding strategic partnership, and make everything else – from trade to defense cooperation to diplomatic coordination – more difficult.

The United States and India should urgently seek ways to bridge their differences over Iran. A genuine partnership on this issue might see India using its unique role to carry messages to the Iranian leadership and provide insights about Iranian behavior to the American side, while the United States works with New Delhi to pressure Iran on a variety of fronts. For the sake of preventing a nuclear-armed Iran and for the solidity of the U.S.-Indian relationship, the two nations' respective leaders should engage on Iran, and soon.
 

ejazr

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Given how this is panning out, IMO if push comes to shove, we must keep in mind that relations with US-GCC-Israel are more important vis a vis Iran-Central Asia.

Our trade, defence, markets and diaspora communities are more important to us than the assumed leverage over Iran and extra oil we will get with Iran. We can't take an easy way out of just paying Iran in rupees or through Turkey and expect to continue on our merry way. We will have to ingrain ourselves to show that we are actively working on getting Iran to resolve the issue or if we are not brave enough to do that, move out of the way and don't damage our relations with countries that matter.
 

asianobserve

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Dragnet is tightening around Iran. India is once again at a cross-road, the question facing it is clear will it vainly try to grab unto Iran's oil (for the selfish motive of cheaper short term oil, as against long term stability) or help create long term stability by making Iran realise it cannot take on the World?

But this might be an excellent strategy for Indian diplomats, make it harder for the West to gain Indian cooperation and easier for India to gain Western concessions on several crucial issues. We'll see if India is really playing its cards well or simply obstructing for romantic causes...
 
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Iamanidiot

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Dragnet is tightening around Iran. India is once again at a cross-road, the question facing it is clear will it vainly try to grab unto Iran's oil (for the selfish motive of cheaper short term oil, as against long term stability) or help create long term stability by making Iran realise it cannot take on the World?
They won't do anything against Iran it all depends who is the one to call bluff first.An attack on Iran is also an attack on Shia muslims not a good thing for the US
 

asianobserve

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They won't do anything against Iran it all depends who is the one to call bluff first.An attack on Iran is also an attack on Shia muslims not a good thing for the US
Don't bet too much on it. Even Shia-dominated Iraqi government would be secretly happy to see a much weakened Iran...
 

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Don't bet too much on it. Even Shia-dominated Iraqi government would be secretly happy to see a much weakened Iran...
Asian I ll say Iraq is more a Irani colony than US colony .The GCC and US first fell foul because of Cheney's invasion of Iraq.Saddam was an asshole but he was a better alternative than the Shia dominated Iraqi government which is more on Iran's payroll.Sistani the most important Shia cleric in Iraq is through and thorough Iran's man.The Shia's of Iraq won't stay calm in a scenario like this
 

asianobserve

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I think Iraq's lack of romance with the US is for everybody to see. What is not often talked about is the dept of lingering mistrust between the Iraqi government and the Iranian regime. I am aware of their shared religious leanings but one cannot overestimate its influence on their relationship especially since thousands of soldiers and civilians (Shias and Sunnis alike) died in their murderous war in the 80's...
 

Iamanidiot

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I think Iraq's lack of romance with the US is for everybody to see. What is not often talked about is the dept of lingering mistrust between the Iraqi government and the Iranian regime. I am aware of their shared religious leanings but one cannot overestimate its influence on their relationship especially since thousands of soldiers and civilians (Shias and Sunnis alike) died in their murderous war in the 80's...
Yes but its a democracy in Iraq and democracy is nothing but the rule of the mob and Shias come top in such a scenario.At the end of day it is the Shia clerics whho call the shots in Iran&Iraq
 

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But not at the expense that the barter has to be in Gold!
 

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Let Uncle Sam bomb IRAN it will automatically stop ... the Iran oil strategy...
For our politicians .. vote bank is IMP rgt...
Can't you people think beyond nonsense things like "votebank"? :frusty:

Seriously, it is beginning to sound too lame.

Has it occurred to you that there might be a dozen reasons for the government to take the stance that it did? Almost 80% of Indians on DFI are supportive of this decision, read this thread. Now go on, say it - all of us are also "appeasing the Muslim members of DFI". :frusty:

Snap out of looking for "votebank considerations" in every other issue.

As though the dozens of millions of illiterate Muslims in India care a shit about India's oil import policy!
 

asianobserve

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Not at the cost of inviting US at the Iranian mainland in their neighborhood.

US is still in Iraqi soil... Right now, for the mainstream Iraqi Shia in highest Government positions lead by Al Maliki, their biggest threat is not Iraqi Sunnis, it's the Iranian backed Shia forces of Muqtada al-Sadr. They would not want anything more than a weakened Iran as this would directly weaken Al Sadr.
 

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Even amongst the Shias, there is the power struggle in Iraq!
 

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If a U.S.-led ban on importing oil from Iran — recently adopted by the European Union — is making officials in Tehran sweat, it's hard to tell. Iranian President Mahmoud Ahmadinejad claimed Jan. 26 that the West had more to lose from severing trade ties with his country, currently in the crosshairs of international scrutiny because of its controversial nuclear program. Indeed, some analysts predict Iran's output may even grow this year, buttressed by discount deals it cuts with energy-hungry importers such as China and India.

The case of India, in particular, is worth bearing in mind for Americans. New Delhi's ties with Washington have grown especially robust in recent years, a consequence both of India's rise on the global stage as well as the strategic desire on the part of two of the world's leading democracies to have a closer relationship — not least as authoritarian China poses geopolitical headaches for both. But while U.S. diplomats pressure countries like South Korea and Japan to join the Iran oil ban, they won't get much joy from their Indian counterparts.

India's Oil Minister, S. Jaipal Reddy, confirmed that his country had no intention of halting imports from Iran. India draws some 12% of all its foreign crude from Iran, the second biggest exporter to the oil-thirsty Asian giant after Saudi Arabia. Moreover, as international sanctions tighten around corporations doing business with Iran, it appears the Indians and perhaps the Chinese will explore paying the Iranians with gold, the Japanese yen or even in part with their own national currencies. Call it one more episode of the post-American world: considerable regional powers are now attempting to unhinge bilateral trade ties off the U.S. dollar or the euro.

Indian officials, including Reddy, insist that New Delhi will abide by U.N. sanctions authorized by the Security Council, but not other measures taken unilaterally by the U.S. and other Western countries. "We will scrupulously adhere to the sanctions imposed by the U.N. No less, no more," said Reddy.

Richard Fontaine, a senior adviser at the Center for a New American Security, fears the "collateral damage" of Washington's Iran gambit "could be the U.S.-India relationship." He writes in the Diplomat:

With the issue heating up in Washington and other world capitals, and with the new U.S. sanctions poised to go into effect, there's the danger of a real impasse. Members of the U.S. Congress will be dismayed if India appears to stand outside a concerted international effort to press Iran at a critical inflection point. Members of the Indian parliament, for their part, will not particularly appreciate being publicly goaded to get tough on Iran.

Dating back to the years of the Cold War and the height of the third-worldist Non-Aligned Movement, India has long championed its foreign policy autonomy. Relations warmed under the George W. Bush Administration, and the two sides penned a landmark nuclear-energy deal, but Indian politicians still bristle at the assumption that their country is being drawn into an American orbit.

Indian cultural bonds with Iran are deep — it could be argued that, just a few centuries ago, the main centers of Persian literature and civilization were indeed in what's now present-day India. These days, Tehran and New Delhi are solidly united in their mutual hatred of the Pakistani-backed Taliban in Afghanistan. A decade ago, they both supported the anti-Taliban rebel Northern Alliance, whose members rose to the fore in Kabul following the 2001 U.S. invasion of Afghanistan. Now India has helped developed the Iranian Arabian Sea port of Chabahar and is constructing roads and highways from the Iranian border into central Afghanistan. It's a strategic platform that boosts Indian influence in war-torn Afghanistan, something strategists in Washington may want to preserve following the expected U.S. withdrawal in 2014. Indeed, Indian interests in Afghanistan are likely far more in concert with the U.S. than those of Pakistan or China, which has steadily expanded its Afghan footprint as well. The continued escalation of tensions in the Persian Gulf, though, may reset a number of geopolitical calculations, an unwelcome event in a part of the world that has no need for more quagmires.

Read more: To Confront Iran, Will the U.S. Risk Relations with India? | Global Spin | TIME.com
 

asianobserve

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Indeed, Indian interests in Afghanistan are likely far more in concert with the U.S. than those of Pakistan or China, which has steadily expanded its Afghan footprint as well.

The more reason that Iran's leaders must be at least civil to not only India but also the West (thus the need to change regime). Unless of course India sees the West as a competitor and is strategically trying to play chess in that region (Iran-Afghan area to be more precise)... which it cannot win.
 

Armand2REP

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US is still in Iraqi soil... Right now, for the mainstream Iraqi Shia in highest Government positions lead by Al Maliki, their biggest threat is not Iraqi Sunnis, it's the Iranian backed Shia forces of Muqtada al-Sadr. They would not want anything more than a weakened Iran as this would directly weaken Al Sadr.
US is out of Iraq. They don't want to be subject to Iraqi law. Biggest threat to Iraq is Al Maliki. He is a tinpot dictator who locks up his political opposition and tortures them like Saddam.
 

panduranghari

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Given how this is panning out, IMO if push comes to shove, we must keep in mind that relations with US-GCC-Israel are more important vis a vis Iran-Central Asia.

Our trade, defence, markets and diaspora communities are more important to us than the assumed leverage over Iran and extra oil we will get with Iran. We can't take an easy way out of just paying Iran in rupees or through Turkey and expect to continue on our merry way. We will have to ingrain ourselves to show that we are actively working on getting Iran to resolve the issue or if we are not brave enough to do that, move out of the way and don't damage our relations with countries that matter.
I disagree. The diaspora communities are not critical as much as oil is critical. I think oil is the necessity today. Trade, Defence, markets, Diaspora will all toe the line if the country makes economic progress and thats possible only with OIL. End of.

BTW I do not see any problem with Iran developing nuclear tech. Its a bit rich coming from USA and Eurozone to curb Iran's nuclear ambitions. Just my opinion.
 

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