BLBG:Clinton Presses India for More Cuts in Iranian Oil Imports
Secretary of State Hillary Clinton urged India to further curtail oil imports from Iran as part of a U.S.-led campaign to pressure the Persian Gulf state over its disputed nuclear program.
India is “certainly working toward lowering their purchase of Iranian oil,” Clinton told a town-hall meeting in the eastern Indian city of Kolkata today. “We hope they will do even more,” she said, adding that the U.S. believes there are adequate supplies of crude in the international marketplace to enable it to do so.
Clinton meets officials in New Delhi today and tomorrow to discuss cooperation on issues that include stability in Afghanistan after the withdrawal of NATO troops and efforts to increase bilateral trade and investment, according to a State Department official who spoke on condition of anonymity. Her visit comes ahead of a June 28 U.S. deadline to punish nations that don’t significantly reduce oil imports from Iran.
U.S. sanctions have been an irritant in relations with New Delhi, which was the second-biggest buyer of Iranian oil last year. India imports about 70 percent of its crude and has growing demands for an economy forecast to expand 7.3 percent in the year through March 2013, making energy security a top concern for the government of Prime Minister Manmohan Singh.
European Embargo
India, which says it has already reduced purchases from Iran to less than 10 percent of its crude imports, has criticized the imposition of unilateral sanctions by any one nation. Still, U.S. and Indian officials say that Singh’s administration is quietly cooperating while seeking a waiver from the American penalties on financial transactions with Iran.
The U.S. law, along with a European Union oil embargo that takes effect July 1, are pillars of a campaign intended to squeeze Iran’s main source of revenue and force the Persian Gulf state to meet international demands over its nuclear program, which the U.S., Europe and Israel say is a cover for developing an atomic weapons capability. Iran says it is for civilian energy and medical research.
“We do not believe Iran would’ve come to the table if there were not sanctions and pressure,” Clinton said today. That’s the “reason why India, China, Japan, European countries who are the primary purchasers of Iranian oil are being asked to lower their supply to pressure Iran.”
Sanctions Waiver
Representatives of the five permanent members of the United Nations Security Council -- Britain, China, France, Russia and the U.S. -- plus Germany will meet with Iranian officials in Baghdad on May 23.
The U.S. last month exempted 10 EU nations and Japan from its upcoming sanctions, crediting them with significantly reducing imports of Iranian crude.
Carlos Pascual, the U.S. special envoy for international energy affairs in charge of negotiations with the 12 Iranian oil importing nations who have not yet been granted exemptions, will follow up on Clinton’s visit with a mission to New Delhi later this month. Clinton said today that it was too early to tell whether India would win a waiver.
Financial sanctions imposed over the last year have made it difficult to find banks to process cross-border payments in hard currency for Iranian oil, leaving India with an unpaid debt. Officials are establishing a rupee account at state-run UCO Bank (UCO) that would allow India to pay for up to 45 percent of its Iranian oil purchases, and which Iran could use to purchase Indian goods.
Iran Delegation
Clinton’s trip to New Delhi coincides with the visit of an Iranian trade delegation to discuss the arrangement. As the areas under discussion are foodstuffs and other non-strategic items, the U.S. does not have a problem with the arrangement, according to the State Department official accompanying Clinton.
India has been supportive of efforts by the U.S. and the other permanent members of the United Nations Security Council to persuade Iran to accept a deal to abandon illicit aspects of its nuclear program in talks that began last month, according to U.S. officials.
Clinton will also discuss India’s support for economic development and stability in Afghanistan following the pullout of NATO combat troops by the end of 2014, U.S. officials said.
Afghan Aid
India has a $2 billion economic assistance program in Afghanistan, and a government-backed consortium of seven Indian steel companies has won the rights to invest $7.8 billion in Afghanistan’s Hajigak iron deposit.
U.S.-India trade, which rose 19 percent over the last year to $100 billion, will also be on the agenda as Clinton presses for better terms for U.S. companies investing in India.
Clinton met with West Bengal Chief Minister Mamata Banerjee, a power broker in parliament who has opposed economic reforms championed by the government. The U.S. is seeking progress from Singh’s efforts to loosen restrictions on foreign investment in the finance sector and permit large foreign multi- brand retailers, such as Wal-Mart Stores Inc. (WMT), to enter the Indian market.
To contact the reporter on this story: Indira A.R. Lakshmanan in Kolkata at ilakshmanan@bloomberg.net
To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net
