US Ambassador to the UN Nikki Haley with India’s Prime Minister Narendra Modi on June 27 (Photo: Twitter handle @nikkihaley)
It is not clear to me from reading news reports whether India has decided to truckle under the unambiguous US demand to stop importing crude oil from Iran or stand its ground and tell Washington to take a hike.
A Reuters story by Nidhi Verma on June 28 said, “India’s oil ministry has asked refiners to prepare for a ‘drastic reduction or zero’ imports of Iranian oil from November, two industry sources said, the first sign that New Delhi is responding to a push by the United States to cut trade ties with Iran.”
In contrast, a CNNMoney report by Rishi Iyengar on June 27 said, “One of the biggest buyers (India) of Iranian oil is unlikely to comply in full with US demands to reduce imports to zero.”
Nikki Haley, the US Ambassador to the United Nations, who recently visited India, was quoted as having told Prime Minister Narendra Modi to reduce New Delhi’s dependence on Iranian oil. “Sanctions are coming (on Iran) and we’re going forward on that, and with India and the U.S. building strong relationships we hoped that they would lessen their dependence on Iran,” she told reporters.
“There’s a will, a political will, from both sides to figure out how to make this work,” Haley said. “Prime Minister Modi very much understands where we are with Iran, he didn’t question it, he didn’t criticize it, he understood it and he also understands that (India’s) relationship with the U.S. is strong and important and needs to stay that way.”
My first reaction on reading the reports of Haley asking India to reduce Iranian oil imports was “Yeah, right. She says and he does it. Not gonna happen.” It appeared for a couple of days after my June 27 reaction that I was completely wrong and that New Delhi may indeed consider complying with the US request. Now it appears that things may be a little more nuanced than that. I may still be wrong but not so flamingly so.
My reading of the situation is still close to my first reaction. Here is why. India imports 700,000 barrels of Iranian crude a day. Iran is India’s third largest supplier of crude after Iraq and Saudi Arabia. India is second only to China in buying Iranian crude. Iran is not just a supplier but a strategic supplier for India.New Delhi has deep civilizational and strategic relations with Tehran. Even at the height of sanctions against Iran, India continued to buy crude from there using the rupee to settle payments.
Modi is preparing for a potentially rough national election in 2019 and reducing crude supply from Iran would mean even higher gas prices,a decisive election issue because of its deep impact. As it is, there is widespread disaffection across India at his handling of the economy, which despite his characteristic bombast, has failed to create any significant number of jobs. Higher oil prices directly pose an existential threat to the electoral constituency that has uncritically embraced Modi—the middle class. But they too have been antsy lately because of the subpar progress on various fronts.
The narrative of India truckling under US pressure does not sit well with Modi’s image of a barrel-chested nationalist who would do nothing to dilute the country’s pride on the international stage. While that is just a narrative meant for popular consumption, his foreign policy handling has been quite a worrisome spectacle. The Trump administration, which was lapped up in its early months by Modi’s Bharatiya Janata Party and its extended right-wing Hindu affiliates, has not been particularly friendly in recent months with issues such as trade tariffs. President Trump has routinely slammed India’s approach to tariffs.
Modi was seen as a refreshingly transactional prime minister when it came to foreign affairs but in Trump he has found someone who is utterly, unreliably transactional making US-India relations tricky despite assertions of growing strategic convergence. The US threat of imposing sanctions against India if it went ahead with the purchase of S-400 antimissile defense shield from Russia is bound to have caused serious concerns among India’s strategic community. New Delhi has taken a tough stand saying that deal will not be changed.
“In all our engagements with the U.S., we have clearly explained how India and Russia’s defense cooperation has been going on for a long time and that it is a time-tested relationship,” India’s Defense Minister Nirmala Sitharaman said recently.
The postponement of the so-called 2+2 talks scheduled for July 6 between Secretary of State Mike Pompeo and Secretary of Defense James Mattis on the US side and External Affairs Minister Sushma Swaraj and Sitharaman on the Indian side may have been projected as routine. However, it wouldn’t be lost on strategic experts in Delhi that the postponement at the very least suggests that India is seen as dispensable by the Trump administration. This is the second time that the much anticipated strategic dialogue has been postponed. The first time it was in March.
Preoccupations with North Korea and the just scheduled summit between Trump and Russia’s President Vladimir Putin are being cited for the postponement. One should not read too much into the second postponement but one is tempted to given the other developments.
I think India needs to take a position that is becoming of its strategic and civilizational strengths as a self-assuredly independent nation not beholden to the caprice of an unpredictable leader in Washington. I am not sure if Modi has the boldness to do that despite his much projected optics.