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U.S. pressures India to alienate strategic partner Iran

U.S. Secretary of State Hillary Clinton (L) meets with India's Chief of India's ruling Congress party Sonia Gandhi in Delhi May 7, 2012.

SHANNON STAPLETON/REUTERS/SHANNON STAPLETON/REUTERS

When Hillary Clinton visited the Indian capital last week, the prickly subject of Iran was top of her agenda for talks with Prime Minister Manmohan Singh.

But even as the American Secretary of State was bluntly asking India to get onside with Western sanctions against Iran and its nuclear program, another set of meetings with Indian officials was in progress just down the road. That one was full of Iranian government delegates and business people, here to sign new trade deals.

India is walking a precarious line these days, attempting to placate the U.S., with whom it has a rapidly growing trade and strategic relationship, while retaining close relations with Iran – a regional friend that's a source of badly-needed fuel, and more.

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Ms. Clinton's main focus was India's purchase of Iranian oil. India is currently the number-two buyer of Iranian crude, which makes up 12 per cent of the energy need of this fuel-hungry nation. When the U.S. and European Union sanctions aimed at ending Iran's nuclear program started to squeeze the international banking system, making it hard for India to pay for Iranian oil, the two countries worked out a scheme that lets India pay nearly half its bill in rupees – which Iran then spends on Indian food and pharmaceutical imports.

"It's a double win for New Delhi," said Neil Padukone, a fellow with the Takshashila InstitutionDelhi is drawing on a lesson here that it learned from another case where its energy needs and foreign policy intermingled – in Burma. Initially, democratic India froze out the junta that took power in what became Myanmar. But then it saw China – which is today India's most serious strategic rival – move in and secure access to gas fields and hydroelectric power at preferential rates, while India was shut out. Already, Chinese state-backed firms have secured more than $40-billion in contracts in Iran's oil and gas industries, making up some of the capital gap caused by the sanctions.

"That was one case where India realized it's not just a matter of disengaging and getting the results it wants," said Mr. Padukone, of the Takshashila Institution. "India's view is, 'if we drop this country, China will pick up the pieces on preferential terms.'"

And finally there are domestic considerations: There is a sizable Shiite community in India's 120 million Muslim minority, who look to Qom, Iran, as their spiritual centre. The government cannot afford to alienate them.

At the same time, India's far-left parties, critical to the ruling coalition, make a show of decrying the U.S. attempts to meddle in foreign policy.

India has repeatedly voted against Iran at the International Atomic Energy Agency, and encouraged it to abide by the provisions of the non-proliferation treaty it signed. But Delhi endured its own years of sanctions and isolation over the nuclear issue; it doesn't like the policy, and it doesn't believe it works.

"In principle we resent sanctions that other people try to impose on us. We abide by sanctions that are internationally sanctified by the United Nations Security Council," said Mr. Parthasarathy. "And beyond that it's not for us to lecture others on this issue."

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