Hillary Clinton is visiting India in the hope of persuading the country to halt oil imports from Iran or face sanctions itself. RT discussed the subject with Neil Padukone, an expert in geopolitics at the Takshashila Institute.
RT: The US and other Western nations have been ramping up pressure on the Iranian nuclear program for a long time now. But why bring India into it?
Neil Padukone: For the last five or ten years or so, India and Indian companies have been increasing their presence in the Iranian energy sector. So much so that a number of Indian oil refineries are specifically designed to refine Iran’s particular blend of crude oil and so as a result of this engagement, India’s become, along with China, one of the largest investors in Iran’s energy sector and one of its largest importers of crude oil. So if there’s going to be any dent to Iran’s energy sector, it’s going to have to involve countries like India and China and others that invest heavily in it.
RT: What will it mean for India if the US does, in fact, hit New Delhi with sanctions?
NP: I’m not sure if New Delhi itself would be directly hit, but its energy companies would certainly be directly sanctioned. But the challenge is that it wouldn’t be all that easy to switch from Iranian crude to other sources, in part because the refineries in India are particularly geared to refine Iranian crude and it would take a pretty difficult and extensive retrofitting process to be able to do that. But at the same time it’s not just a matter of energy dependence because Pakistan has not allowed India to access Afghanistan through its borders across its territory. India has been forced to look a little further abroad. So it developed a very strategic link between the Chabahar Port in eastern Iran on the Gulf of Oman and western Afghanistan. And this road not only takes away Pakistan’s monopoly on Afghanistan’s maritime trade, but it also gives India some very strategic import access to Afghanistan and to central Asia in general. So sanctions would be a little more complicated than just withdrawing from the energy sector.
RT: What is India’s stance on Tehran now?
NP: India has been facing a dilemma because it depends on Iran not only for energy and other trade, but also for strategic access to Central Asia and for other strategic ties. So on one hand it can’t entirely drop Iran, also for fear that if it drops Iran, China would pick up the pieces, especially in preferential financial terms. But at the same time, it can’t entirely reject the United States’ position because India is, of course, America’s burgeoning strategic ally. They have tremendous amounts of trade, they share strategic interests elsewhere in the world. So for the last five years and continuing, India has been trying to balance and juggle its relations between Iran and the United States.
RT: What is India’s alternative if it does stop buying oil from Iran?
NP: As it’s been doing over the last few years, it’s been looking for creative means to engage with Iran economically. That involves creating new corporate entities that are outside of the realm of Western financial sanctions and even buying Iranian crude through rupees or with gold and other goods. So it’s sort of reverted to a barter system. So that’s one method of continuing to engage with Iran economically.
India buys almost 80 per cent of Iranian crude, but has vowed to curtail its import of Iranian oil by 20 per cent, officials reported. For India, Iranian oil imports currently make up approximately 10 per cent of total oil imports, but that number is set to fall to seven per cent next year.