U.S. and European sanctions will not prevent India, the world’s fourth largest consumer, from importing oil from Iran, its Finance Minister Pranab Mukherjee says.
As Washington ratchets up pressure on countries around the world, particularly large consumers of oil, to cut down their imports from Iran, New Delhi is in no position to oblige. Some 12 percent India’s oil imports comes from Iran.
"It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them," Mukherjee told a news conference here in Chicago, after concluding a short, day and a half long visit. I was at that news conference and was preempted by a fellow journalist in my question about the implications for India of the Iran-U.S. tensions over Tehran’s threat to blockade of the Strait of Hormuz.
It is a delicate balancing act for India, sandwiched as it is between its ever rising oil demand and considerations of geostrategic ties with the United States. 2012 being a presidential election year in America, President Barack Obama not just has to be tough on Iran but has to be seen as tough. India’s continuing of its Iranian oil import does not significantly weaken the sanctions but it does have a salutary impact in so much as the world’s largest nuclear armed democracy chooses to do business with Tehran.
In terms of India’s broad economic outlook Mukherjee acknowledged that the economic growth is expected to slow down to seven percent this year compared to 8.5 percent last year. Although most major economies would not only accept seven percent but even celebrate it, in the Indian context it is regarded as low because it has averaged over 8.5 percent over the last decade and there were projections it could hit the double digit mark until the global economic meltdown of 2008.
