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India Gets Tougher on Iran

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India Gets Tougher on Iran


Last November, India’s senior foreign policy officials made their unhappiness known over Iranian Supreme Leader Ali Khamenei’s remarks about Kashmir being a ‘besieged’ region of the world. They not only called in the Iranian ambassador to express their displeasure, but for the first time carefully abstained from voting on a UN resolution condemning the state of human rights in Iran. (In the past, India had scrupulously voted with Iran to avoid giving offense to this important regional trading partner and tacit ally in Afghanistan).

This week, the Reserve Bank of India, India’s central bank, issued explicit guidelines indicating that Indian companies would no longer be allowed to use the Asian Clearing Union, a regional clearinghouse, for financial transactions with Iranian companies. This decision, in the language of international relations, constitutes a costly signal. It entails significant costs because India and Iran have gas and oil trade to the tune of $11 billion annually.

It’s also costly in other ways. The government will also pay significant political costs because the opposition in parliament -- and especially the Communist parties -- will now seize upon it as further evidence of the ruling United Progressive Alliance genuflecting before US pressure. There is, of course, no doubt that the Obama administration had long made it clear that it would prefer to see India distance itself from Iran and join the sanctions bandwagon.

However, it’s not certain that American pressure alone contributed to this decision. Apart from Khamenei’s remark on Kashmir, the Indians have other reasons to express their displeasure with the Iranian regime.

India is on the verge of joining the UN Security Council after nearly a two decade hiatus, and choosing an option that entails significant economic and political costs is yet another way of signaling to the global community that it is prepared to bear new and painful burdens as it competes for an eventual permanent seat on the Council.
 
Signs the Security Council is changing India

Posted By David Bosco Tuesday, January 4, 2011 - 1:32 PM Share
Sumit Ganguly sees evidence that India is shifting its stance on Iran--in a more hawkish direction. Pressure from Washington is clearly important, but he attributes at least part of the change to India's Security Council aspirations and its desire to present itself as a responsible international stakeholder:

This week, the Reserve Bank of India, India’s central bank, issued explicit guidelines indicating that Indian companies would no longer be allowed to use the Asian Clearing Union, a regional clearinghouse, for financial transactions with Iranian companies. This decision, in the language of international relations, constitutes a costly signal. It entails significant costs because India and Iran have gas and oil trade to the tune of $11 billion annually.

It’s also costly in other ways. The government will also pay significant political costs because the opposition in parliament -- and especially the Communist parties -- will now seize upon it as further evidence of the ruling United Progressive Alliance genuflecting before US pressure. There is, of course, no doubt that the Obama administration had long made it clear that it would prefer to see India distance itself from Iran and join the sanctions bandwagon.

However, it’s not certain that American pressure alone contributed to this decision. Apart from Khamenei’s remark on Kashmir, the Indians have other reasons to express their displeasure with the Iranian regime.

India is on the verge of joining the UN Security Council after nearly a two decade hiatus, and choosing an option that entails significant economic and political costs is yet another way of signaling to the global community that it is prepared to bear new and painful burdens as it competes for an eventual permanent seat on the Council.
Trying to game the Security Council reform process is tricky though; too much ardor on Iran may make Moscow and Beijing worry that India will become just another part of the liberal Western bloc on the Council that they've so often resisted. And if they start to feel that way, Russia and China probably wouldn't hesitate to torpedo India's candidacy.
 
I said this in 2009. Russia and India will get further apart. India and the U.S. will start a romantic and two sided love affair.

My near term future prediction: Iran will deceive Pakistan on some issue in coming months but the establishment from both sides will sort out the differences.

India is bending towards Europe which is good for them.

India should ditch Iran.
 
Up Persian creek without a strategy



India must get its act together on Iran…quickly

The apparent lack of policy co-ordination within the Indian government over Iran is really worrying.

We are referring to the RBI’s decisions in recent days closing the Asian Clearing Union (ACU) mechanism to imports—beginning with oil and extending to other goods and services—from Iran. The move not only caught the industry by surprise. And it looks like it caught the relevant government ministries by surprise as well. Given that Iran is India’s second largest supplier of crude oil accounting for around 13 percent ($12 billion) of oil imports and the risk of a short-term supply shock sending oil prices higher, the lack of policy coordination amounts to dereliction of duty.

The lack of coordination reflects a deeper malaise—the UPA government’s inability to evolve a coherent policy on Iran, with the result that New Delhi is forever in reactive mode. [See: Will the Ayatollah step behind the line?] The overall failure of Prime Minister Manmohan Singh and his government to communicate with the public—witness how they botched up the India-US nuclear deal—means that no political leader explains why the government is doing whatever it is doing, and why difficult decisions have to be made. The latter would still be acceptable if the government executed in a competent fashion—like in the case of the nuclear deal—but intolerable where execution is poor.

In this case, there is no evidence that the relevant cabinet committees ever discussed the implications of RBI’s move and took the necessary measures to manage the fallout. The RBI’s independence doesn’t preclude coordination in matters like this. A competent government would have reassured the markets and the public that although RBI’s measures against imports from Iran would put 13% of India’s supply of crude at risk, it has alternative plans to protect the Indian economy. Instead we were left working out the implications of terse press releases issued by the central bank.

What might those alternative plans be? These could involve arrangements to import Iranian oil through other currencies (or the Indian rupee), assurances from other suppliers (read Saudi Arabia) that they will make up the shortfall or both. Given Saudi interests in keeping the lid on Iran’s nuclear programme, New Delhi could have extracted the latter as the price of tightening the financial screws on Iran. Indeed, not extracting such a price is a good opportunity squandered.

India must get its act together on Iran. First, it is in India’s interests to ensure that Iranian oil and gas continue to provide the economy with the supply diversity that an oil-importing country needs. If this objective is inconsistent with playing responsible global citizen then so be it.

Second, given that Iran shares an interest in preventing Afghanistan from falling under the sway of a Saudi-Pakistani-Taliban nexus, India needs to continue to engage Iran.

Third, while a nuclear-armed Iran may or may not be entirely in India’s interests, it is far better to manage the consequences thereof than to countenance the use of military force in a futile attempt to stop it.

Finally, while international sanctions are unlikely to prevent a determined Iran from developing a nuclear weapon, it is geopolitically costly to stay out of the Western consensus. Unless sanctions prohibit India from purchasing Iranian oil and gas, it is better for India to be part of the sanctions regime.

Reconciling these objectives is not easy, but not impossible either. The big prize in foreign policy, however, is for India to assiduously work to bridge the divide between the United States and Iran. This—more than securing a permanent seat at the UN Security Council—is a project that is worthy of a rising global power. This task of international statesmanship requires a real leadership at South Block and the PMO. Till that time we can have day-to-day issue management, not strategy.

The new year begins with a question mark on oil imports from Iran. The larger question mark though is whether the UPA government will now realise that it finds itself in a jam over Iran because it has no ideas of its own.
 
I said this in 2009. Russia and India will get further apart. India and the U.S. will start a romantic and two sided love affair.

My near term future prediction: Iran will deceive Pakistan on some issue in coming months but the establishment from both sides will sort out the differences.

India is bending towards Europe which is good for them.

India should ditch Iran.
Its more of a love affair between usa and the PM Manmohan singh.So most of the anti usa cabinet ministers are done with in his cabinet like that of former minister for external affairs natwar singh,who was staunch anti -usa and pro-iran.
 
Its more of a love affair between usa and the PM Manmohan singh.So most of the anti usa cabinet ministers are done with in his cabinet like that of former minister for external affairs natwar singh,who was staunch anti -usa and pro-iran.

You are on the wrong page. Talk to me in two to three years.
We will read your statement again.
Your people will get jobs, infrastructure...
 
You are on the wrong page. Talk to me in two to three years.
We will read your statement again.
Your people will get jobs, infrastructure...
Lets wait till 2014 then unless UPA govt. loses trust motion midway or manmohan singh is forced to resign midway to make way for rahul .Anyway this gonna be last term for manmohan singh as PM.
 

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