(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
By Jeff Glekin
MUMBAI May 7 (Reuters Breakingviews) - It takes chutzpah to
host U.S. Secretary of State Hillary Clinton and a trade mission
from Tehran on the same day. That's what India is doing - and it
has so far played the two sides off rather well. While good
relations with the United States are important, Iran's cheap oil
is too attractive to pass up, and India has a long history of
goodwill towards its Persian neighbour. A compromise looks
India has been publicly dismissive of U.S. calls to stop
doing business with Iran. Given its $185 billion trade deficit,
it is not hard to see why New Delhi would rather keep trade
flowing. Oil accounts for two-thirds of India's import bill, and
Iran is a major supplier. India has even been able to negotiate
payment in its own currency, the rupee. That's like a gift
voucher which Tehran can only spend in Indian shops.
Clinton, meanwhile, has called for India to support U.S.
sanctions. But she can't afford to push too hard. Given the
current fragility of India's government's coalition, a big
foreign policy spat is the last thing she wants to provoke.
There are still many on India's left, including members of the
ruling Congress party, who are firm believers in a policy of
non-alignment, which dates back to the Cold War.
Privately, the Indians seem to be more co-operative. Under
pressure from politicians, refiners have cut imports of oil from
Iran by 15-20 percent. That strategy may be enough to win a
waiver from U.S.-led sanctions during Clinton's two-day visit,
assuming American politicians believe a quietly helpful India is
better than an openly hostile one.
India's best outcome would be to keep both sides happy. As
Iran's second largest customer, it is in a good position to
secure a discount to the market price of oil - something it is
unlikely to get from other suppliers like Saudi Arabia. And the
United States may be prepared to bend its rules to keep an
emerging superpower on-side. New Delhi's diplomatic balancing
act might just work.
- U.S. Secretary of State Hillary Clinton said she hoped
India would do "even more" to cut its purchases of oil from
sanctions-hit Iran as there was adequate supply available from
other countries such as Saudi Arabia.
- Speaking in Kolkata on a visit to India on May 7, Clinton
said there would be a decision in about two months as to whether
India would be given a waiver from sanctions over Iran oil
- Indian's oilmeal exports to Iran rose more than two fold
to 97,904 tonnes in April from 39,798 tonnes last month, Reuters
reported on May 7.
- India is trying to boost exports to Iran in order to
reduce its trade imbalance as it seeks ways to cut an $11
billion a year bill for oil imports that it is finding hard to
pay for because of western sanctions.
- Reuters: Clinton says India needs to do more on Iranian
- For previous columns by the author, Reuters customers can
(Editing by John Foley and David Evans)