India’s Reluctance to Comply With Iran Oil Sanctions Draws Fire on Capitol Hill
(CNSNews.com) – The Obama administration’s nominee to serve as ambassador to India assured lawmakers this week that concerns about India’s energy relationship with Iran will be among her “top priorities” if she’s confirmed. But after India’s foreign secretary held talks with senior U.S. officials the same day, the State Department’s readout of topics discussed made no direct reference to Iran.
At her Senate confirmation hearing Tuesday, career diplomat Nancy Powell faced questions about attempts by New Delhi to get around U.S. sanctions targeting the Central Bank of Iran by finding alternative ways to pay for Iranian oil.
It was recently reported that India was considering paying in gold for Iranian crude, and this week the Iranian government said the two sides agreed that India would use its currency, the rupee, to pay for almost half of its oil purchases, while exploring other mechanisms to cover the remainder.
Sen. Robert Menendez (D-N.J.) told Powell that while he had been encouraged by the efforts of other major customers of Iranian oil, such as Japan and South Korea, to “look for ways to come into compliance” with the sanctions – “even as they face challenges obviously in doing so” – India was a different matter.
“The Indian government, which is one of Iran’s largest crude customers, seems to be rebuking the sanctions and looking for workarounds, including considering payments in gold and transactions that detour around the Central Bank of Iran – that at the end of the day, still is helping the Iranian government have the resources to fuel their nuclear ambitions,” he said.
“For our sanctions to be effective, it’s crucial for all nations, especially democratic nations like India, work together to confront Iran and insist that it terminate its efforts to achieve nuclear weapons capability.”
Powell in her response said India shared the U.S. desire to see Iran remain a non-nuclear state. She noted that India had supported the U.S. on the issue four times at the International Atomic Energy Agency (IAEA).
Menendez retorted, “If countries like India are basically going to pay in gold or find other ways to circumvent the sanctions, while I appreciate what you said about India sharing our goals – well, you could share our goals but you could ultimately continue to facilitate the resources that are necessary for Iran to achieve its nuclear power.
“And so we need more than their goodwill of sharing our goals; we need their actions.”
After Menendez pressed Powell for an assurance that she would prioritize the issue, she replied, “It most certainly will be one of the top priorities.”
In response to a question on the issue by ranking Republican, Sen. Dick Lugar (Ind.), she said, “If confirmed, I know that this is going to be one of the issues that I will be spending a great deal of time on.”
On the same day as the hearing, Indian Foreign Secretary Ranjan Mathai held discussions with senior officials including Deputy Secretary William Burns and Undersecretary Wendy Sherman, with Secretary of State Hillary Clinton stopping by during the meeting with Burns.
Asked for details of the discussions, State Department spokeswoman Victoria Nuland Wednesday read out a brief statement.
“The conversations included virtually every topic on the bilateral and multilateral agenda with India, including our joint cooperation to combat terrorism and violent extremism, defense cooperation, planning for the upcoming strategic dialogue, important civil nuclear cooperation, shared energy security interests, regional and economic integration along the New Silk Road, joint interests in Africa, East Asia, and the Middle East, and our engagement at the U.N. and in multilateral fora.”
Although “shared energy security interests” or “joint interests in … the Middle East” could arguably encompass the Iranian issue, Nuland did not directly refer to Iran in the list of topics discussed.
Only when asked specifically about India-Iran concerns, did she add, “Well, certainly the subject of Iran and working together to reduce India’s dependence on Iranian oil came up. We are working well through these issues and we will continue to have those conversations.”
India says it supports the goal of preventing Iran from acquiring nuclear weapons. At the IAEA, it voted in favor of resolutions critical of Iran in 2005, 2006, 2009 and again last November.
Its support was considered crucial by the West, given India’s leadership in the developing nations’ bloc, and the government came under fire from leftists at home for its stance. (Countries that voted against the various resolutions included Cuba, Venezuela, Syria, Malaysia and Ecuador, while Brazil, Pakistan, Egypt and Turkey were among those to abstain.)
But India is also a major purchaser of Iranian crude. In 2010, Iran provided 11 percent (345,000 barrels a day) of India’s total imports, according to the U.S. Energy Information Administration, making it Iran’s third-biggest customer, after China and Japan.
EIA figures for the first six months of 2011 show that the Indian imports from Iran dropped to 328,000 barrels a day.
But on Wednesday a Dow Jones report carried by the Wall Street Journal cited industry sources as saying Indian imports of Iranian crude rose last month to 550,000 barrels a day, a jump of 37.5 percent from December.
India says it complies with U.N. sanctions but does not support those imposed by individual countries.
“We will not decrease imports from Iran,” Finance Minister Pranab Mukherjee said on January 29. “Iran is an important country for India despite U.S. and European sanctions on Iran.”
On Monday, Mathai told a Center for Strategic and International Studies event in Washington that India has no desire to see the spread of nuclear weapons in West Asia.
“India’s position on the question of Iran’s nuclear program is well known, and our votes in the IAEA speak for themselves,” he said. “We believe that while Iran has the rights to peaceful uses of nuclear energy, it must also fulfill its international obligations as a non-nuclear weapon state under the [Nonproliferation Treaty].”
Mathai acknowledged India’s relationship with Tehran.
“Iran is our near neighbor. It is our only surface access to Central Asia and Afghanistan and constitutes a declining but still significant share of our oil imports – currently just below ten percent,” he said.
“Our relationship with Iran is neither inconsistent with our nonproliferation objectives, nor is it in contradiction with the relationships that we have with our friends in West Asia or with the United States and Europe,” Mathai continued.
“These are important, even if difficult issues, and one of the heartening aspects of the India-U.S. relationship has been that we are able to discuss them respectfully and candidly, with a sense of appreciation of each other’s perspectives – and a recognition, I believe, that while the choices that each makes may have a bearing on the other, they are certainly not directed against the other.”
Ahead of a meeting with Mathai on Wednesday, House Foreign Affairs Committee chairman Rep. Ileana Ros-Lehtinen (R-Fla.) said that among matters she planned to discuss, “I also will raise the Iran issue, and the need for responsible nations to work together to further isolate and pressure the dangerous extremists in Tehran.”