Iran sanctions: Why India is in a tight spot

As the world’s largest importer of Iranian crude oil, and as a close strategic ally of the United States, India is in a tight spot.

The US wants to put pressure on the Iranian regime to give up any ambitions it may have toward developing nuclear weapons. For the Indian government and Indian companies, this presents a quandary. How to satisfy Western allies – and abide by US-led sanctions against companies that do business with Iran – while also securing the energy needs of its large, high-growth economy?

Iran says its nuclear program – which has made strides despite heavy international sanctions and a mysterious spate of assassinations against Iranian nuclear scientists – is purely for civilian energy use. Just this week, Iranian President Mahmoud Ahmadinejad announced that Iran was now capable of building its own centrifuges for enriching uranium for nuclear fuel rods.

 “The arrogant powers cannot monopolize nuclear technology,” Mr. Ahmadinejad was quoted as saying on Iranian state television. “They tried to prevent us by issuing sanctions and resolutions but failed.”

Nobody expects India’s neutrality – or its unwillingness to finger Iran in a series of recent bombing attacks against Israeli diplomats on Indian, Thai, and Georgian soil – to seriously disrupt the US-Indian relationship. That relationship was hard won over the past decade, after years of frigid ties during the cold war, and has now developed into one of Washington’s more reliable alliances in Asia. Both Washington and New Delhi share common goals on increasing trade ties, combating international terror groups, and in balancing the growing economic and military ambitions of China.

So in the present environment, India is keeping the conversation going with both the US and Iran. India reassures the US that it is firmly opposed to the emergence of Iran as a new nuclear weapons state. And last month, India became Iran’s biggest customer of crude oil, purchasing 2.2 million tons of it for its refineries.

India has serious energy needs: India is trying to get power to the nearly 300 million Indians who currently have no access to electricity; in the meantime, many of these people rely on kerosene for lighting. 

The US government seems to recognize that India cannot simply shut off the flow of Iranian oil, but White House spokesman Jay Carney told reporters on Wednesday that the US expects its allies to keep the pressure up on Iran.

"I think that we have made clear to all of our allies and partners around the world about the importance of isolating the regime and Tehran and putting pressure on Iran to give up its nuclear weapons ambitions," Mr. Carney was quoted by the Press Trust of India as saying, "and that includes, obviously, India as well as many other nations."

Congress has also expressed concern. Reps. Steve Israel and Richard Hanna sent a letter to India's ambassador to the US urging India to rethink its plans to send a trade delegation to Iran, writing that "now is not the time" to expand business ties.

US and European Union sanctions against Iran have already driven up the price of oil, a fact that will be felt at fuel pumps around the world. On Wednesday afternoon, the price of a barrel of Brent crude was selling for $118, the highest price since August 1.

US sanctions against the use of US dollars to pay for Iranian oil have put India in a tough spot. In October, India imported nearly no Iranian oil, because it could come up with no mechanism to pay for it. Last month, Iran agreed to accept partial payment for oil deliveries in Indian rupees, and the oil started flowing again.

Meanwhile, Indian investigators continue to gather clues to the attempted assassination of an Israeli diplomat on Feb. 13 in New Delhi. According to press reports from India, a motorcyclist rode up alongside the car of Israeli embassy staffer Tal Yehoshua-Koren and attached a magnetic “sticky bomb” to the vehicle. The blast left Ms. Yehoshua-Koren injured. Indian and Israeli bomb experts are apparently coordinating a joint investigation.

 “We have no information or evidence of any country, organization, entity and individual being involved,” said Syed Akbaruddin, the spokesperson of India’s Ministry of External Affairs, in answer to questions of Iran’s possible involvement in the blast.