India’s decision to send a large trade delegation to Iran in the midst of mounting Western pressures against Tehran’s nuclear program is an unusually assertive move. What New Delhi is explicitly telling the world is that we are living in the times of enlightened self-interest and that it makes no apology about it.
What is particularly striking is a comment by India’s Commerce Secretary Rahul Khullar who has been quoted as saying in respect of the sanctions and the trade delegation, “Tell me why I should follow suit? Why shouldn’t I take up that business opportunity?”
Indian bureaucrats are not known to speak out of turn. Khullar has to have specific political backing from the highest levels of the government to say that. Or at least I hope he does because otherwise the country’s foreign ministry, quaintly called the ministry of external affairs, will have to go into overdrive in European capitals and Washington D.C.
I do not think Khullar is saying something out of the ordinary because Finance Minister Pranab Mukherjee, on a recent visit to Chicago, said, "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." He was responding to a question whether US and European sanctions will prevent India, the world’s fourth largest consumer, from importing oil from Iran. New Delhi is in no position to oblige because some 12 percent India’s oil imports comes from Iran.
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.
Now with the trade delegation India is taking its disengagement from the sanctions regime farther than what many might have suspected. Khullar has argued that there are many products that India can sell to Iran which are not covered by the sanctions.
Apart from bartering oil for wheat, Tehran, according to Reuters, is also willing to accept payment in Indian rupees. It is Tehran’s way of telling Washington that it has no compunctions about trying other currencies against the traditionally preferred US dollar.
Of course, for once India is playing a larger geostrategic game which equally serves its more near-term goals of oil imports. A looming Shia presence to a Sunni Pakistan’s west, Iran is very useful for India in the long-term. India’s overtures at the time of dire need are not going unnoticed by Iran.
