Building pressure

The main purpose of Hillary Clinton's visit to India was to pressure the government into cutting further the oil and gas imports from Iran.

UNITED STATES Secretary of State Hillary Clinton's visit to India in the second week of May once again highlights the importance the Barack Obama administration is giving to the region. The visit took place ahead of the annual U.S.-India strategic dialogue scheduled to be held on June 13 in Washington. In recent years the foreign policy priorities of Washington and New Delhi have increasingly converged. Since the signing of the India-U.S. nuclear deal in 2008, the U.S. has emerged as India's closest strategic partner. On key international issues such as Syria and Iran, the two governments seem to be reading from the same page.

India, owing to domestic economic compulsions, continues to buy oil from Iran, but it is at the same time scaling down the purchases. Finance Minister Pranab Mukherjee told the media in April that oil imports from Iran had been scaled down by 12-13 per cent. Iraq has now replaced Iran as the second biggest supplier of oil to India. Saudi Arabia is the biggest supplier. But the U.S. side is still not satisfied. Hillary Clinton, it is learnt, has sought more assurances from New Delhi on the issue. Prime Minister Manmohan Singh told her during an 80-minute meeting that India was in agreement with the non-proliferation goals set out by the U.S. and its friends in the international community for the region.

External Affairs Minister S.M. Krishna, speaking to the media after talks with Hillary Clinton, said that India scrupulously implemented all United Nations-mandated sanctions on Iran and that any reduction of oil imports from that country would be based on commercial, financial and technical considerations. This remark was aimed at underlining New Delhi's distaste for the additional sanctions the West has imposed on Iran, which go much beyond the U.N. sanctions and are aimed at bringing the Iranian government to its knees. Krishna also sought to give the impression that the decision of the Indian government to scale down imports from Iran was dictated by the compulsions of the market and not because of pressure from Washington.

The Minister described Iran as an important country for India for energy supplies. He used the occasion to underline the importance of the Gulf region for India, pointing out that the region accounted for $100 billion in exports. Krishna reiterated that India stood for a peaceful and negotiated settlement of issues relating to Iran's nuclear programme. Krishna was, however, careful to add that Iran was not a source of discord between the U.S. and India.

The main purpose of Hillary Clinton's visit was to pressure India into cutting further its oil and gas imports from Iran. Interestingly, a 56-member delegation from Iran was also in India at the same time to find ways to enhance trade between the two countries using the rupee trade mechanism. With exports to Europe drying up, Iran has offered more oil to India at concessional rates. Yahya Ale Eshagh, the head of the Teheran Chamber of Commerce, who led the Iranian trade delegation, exuded confidence about the prospects of bilateral trade. He said that despite some problems there was vast potential for exports and imports between the two countries.

U.S. officials are keeping a close watch on the items India exports to Iran. Foodgrains and pharmaceuticals are currently not on the U.S. sanctions list. In March, the Obama administration, while exempting Japan and 10 European nations from penalties for continuing to import Iranian oil, singled out India and China. The U.S. stated at the time that the countries that were exempted had significantly reduced their oil imports from Iran. The reason why India, Japan, China and European countries are being asked to lower their imports is to keep the pressure on Iran, Hillary Clinton said in New Delhi. The U.S. has set June 28 as the unilateral deadline for the implementation of the draconian sanctions it has imposed on Iran. Senior officials in the Obama administration warned in March that the U.S. would have no option but to impose sanctions on India if it failed to significantly reduce oil imports from Iran. Washington is dispatching Carlos Pascual, the U.S. State Department's Special Envoy and Coordinator for International Energy Affairs, to India in mid-May to pile up the pressure on New Delhi to adhere to the Obama administration's deadline.

According to officials in Delhi, Hillary Clinton sought to impress upon the Indian side the gravity of the situation in the Persian Gulf region. She repeatedly stated that the principal threat the U.S. and the international community was facing was a nuclear-armed Iran. During her interaction with the Prime Minister and the External Affairs Minister, she talked about the apprehensions of the Gulf countries regarding Iran's nuclear programme. Many of the Gulf monarchies, notably Saudi Arabia and Qatar, have also been pressuring New Delhi to cut off energy links with Iran.

Hillary Clinton's visit to India came at a time when Iran was preparing for a new round of talks on the nuclear issue with the P5+1 (the permanent members of the U.N. and Germany). The Iranian leadership has repeatedly emphasised that the country's nuclear programme is a peaceful one. Iran, unlike India, Pakistan and Israel, is a signatory to the nuclear Non-Proliferation Treaty (NPT). The Israeli security establishment has also raised serious doubts about assertions by the U.S. and Israel that Iran is racing towards a nuclear bomb.

The Secretary of State's first port of call in India was Kolkata, where she had a highly publicised meeting with Mamata Banerjee, the Chief Minister of West Bengal. The Secretary of State had flown in from Dhaka after advising Bangladesh Prime Minister Sheikh Hasina to stop interfering in the affairs of the Grameen Bank founded by the Nobel laureate Muhammad Yunus. The government in Dhaka has been trying to restructure the bank, a pioneer in microfinance, citing mismanagement under the former chairman. Before that Hillary Clinton was in China, lecturing the Chinese on the importance of human rights.

Mamata Banerjee, known for her antipathy towards the Left, has an ideological soulmate in Hillary Clinton, who regularly targets the governments of Cuba, Venezuela and other Latin American countries for daring to stand up to the U.S. and to its neoliberal economic policies.

During her one-day visit to Kolkata, Hillary Clinton raised the issues of foreign direct investment (FDI) in retail and the sharing of the Teesta river waters with Bangladesh. The Trinamool Congress, though a constituent of the United Progressive Alliance at the Centre, had undermined the Central government's bid to introduce FDI. Mamata Banerjee had also vetoed at the eleventh hour the agreement with Bangladesh on the sharing of the Teesta waters. Bangladesh Foreign Minister Dipu Moni was in New Delhi around the same time as the U.S. Secretary of State. The sharing of the river waters figured prominently in Dipu Moni's talks with her Indian counterpart, Krishna. Speaking to reporters after the meeting, Krishna said that the government was trying to build a domestic consensus on the issue. Many important agreements between the two governments were put on the back burner because of Mamata Banerjee's last-minute volte-face.

The U.S. views Bangladesh and Myanmar as important players in a region where fast-paced developments are taking place. The U.S., it seems, is now in the business of mediating not only between sovereign states but also between federal governments and States within the union. It is the first time in independent India's history that a foreign dignitary has had to intervene, albeit informally, on behalf of the government to make a recalcitrant member of the coalition change its policy. U.S. business concerns such as Walmart have the most to gain from FDI in retail.

The fact that these two issues came up in the talks between Hillary Clinton and Mamata Banerjee has come in for strong criticism. The Polit Bureau of the Communist Party of India (Marxist) noted that the sharing of the Teesta waters was a bilateral issue between India and Bangladesh. The raising of this matter by Hillary Clinton and that too in talks with a State Chief Minister is an uncalled for and unacceptable intrusion into a strictly bilateral affair, the Polit Bureau statement said. Mamata Banerjee denied that these two issues had come up but refused to divulge the nature of the strategic issues they had discussed. According to Mamata Banerjee, Hillary Clinton congratulated her on her long struggle against the Communists and her eventual victory.

Indian officials have said that a broad range of other issues, especially pertaining to Pakistan and Afghanistan, were also discussed during Hillary Clinton's visit. She had tough words for Pakistan. She said that Pakistan had to ensure that its territory was not used to stage terror attacks and that the U.S. was targeting terror groups inside Pakistan that posed a direct threat to its security and to military operations in Afghanistan. She explained that one of the reasons why the U.S. had put a bounty for the arrest and conviction of Hafiz Saeed, the Jamaat-ud-Dawa leader, was because Americans were killed in the Mumbai terror attacks. The U.S. has reason to believe that Hafiz Saeed was one of the principal architects of the attack on Mumbai, Hillary Clinton asserted. India and the U.S. have been sharing intelligence at the highest levels. The two countries have set up a joint working group on counterterrorism.

The U.S. is encouraging India to shoulder more responsibility in Afghanistan as the U.S. military prepares to leave the country. India and Afghanistan had signed a strategic agreement in October last year. Afghan Foreign Minister Zalmai Rassoul was in New Delhi in the first week of May. During his visit, New Delhi announced that it would host a regional meeting to attract investment to the war-torn country.

Rassoul requested Indian help to train the country's security forces. He said that in the long term he was looking for India's assistance in equipping the Afghan armed forces. Indian involvement in Afghanistan is a red rag for Islamabad. Pakistani officials are also upset with the U.S. Secretary of State's statements on terrorism during her visit to India. The Pakistani foreign office spokesman reminded her about the tremendous sacrifices his country had made in the fight against terrorism.