By Colonel Awadhesh Kumar, Veteran Special Forces
India is already the fourth largest economy in the World in terms of PPP and in the foreseeable future is going to displace Japan from its third place. However various international forces are trying their level best to dislodge India from its path to progress. One such attempt is being made by USA President Trump whose Govt has declared unilateral sanctions on Iran.
India is the world’s third-biggest oil consumer but produces just 20 % and needs to import more than 80 % of its requirements. Iran is its third-largest supplier after Iraq and Saudi Arabia, and supplies around 12 % of India’s total imports. On the other hand India is the second biggest crude customer for Iran.
So no wonder Americans are desperate to see that India cuts its imports from Republic of Iran by at least half, so as to give some teeth to the American unilateral sanctions. While announcing sanction the American President was GUNG HO. Now realizing his folly Officials from the U.S. had private discussions on the issue of sanctions in talks last month in New Delhi.
India has expressed its inability to stop oil imports from Iran as they are supplying are being offered at the most competitive rates. As a face saving device, USA may have to supply Oil to India or arrange it at the Iranian rates along with matching shipping costs. New Delhi expects a response as early as next month when talks resume. In case this is done then India may agree to reduce the Iranian imports by 10 to 20 %.
President Donald Trump’s administration has been forced to reconsider its plan to choke off all of Iran’s oil exports after countries including China and India — which together comprise about half of Iran’s oil exports — expressed their inability to halt shipments. Washington is now said to project a 50 percent cut in exports when it reimposes energy sanctions in early November.
After initial success in persuading dependants like Japan and South Korea, U.S. is finding it tough to convince even European Union nations. These push backs are forcing the U.S. to consider waivers to countries on a case-by-case basis as it feels even a significant reduction would be a blow to Iran’s battered economy.
India has rightly continued with Iranian imports even after Trump announced in May that he was withdrawing from the 2015 nuclear deal. Indian Oil Corp., the biggest refiner and a top customer of Iran, has been purchasing oil proportionate to its annual term contracts so far and has booked cargoes for September, its Chairman Sanjiv Singh said on Monday.
India is estimated to have imported 22.6 million tons of Iranian oil during the 12 months up to March 31, 2018. It was 27.2 million tons in 2016-17. This figure has increased from about 11 million tons in 2015-16. Refineries in India were quick to ramp up imports from Iran after the previous round of sanctions were lifted in 2015.
While India has been diversifying its oil supplies ever since, ending purchases from Iran will cost the country in monetary terms on shipping and the savings because of its longest credit repayment period offered compared to any of its other suppliers.
However more than monetary terms, it is the Indo Iranian long term economic and strategic cooperation like Chabahar Project and oil & gas pipeline project that will be in jeopardy. Then there is the issue of India’s action as a Sovereign Nation. Hence we need to be clear on this issue …..India will follow only UN sanctions that too if approved through the due process and not as per the whims and fancies of a few.
India cannot stop oil import from Iran and American sanctions will kick in. Americans will then target the Banks through which we will be dealing with Iran. Therefore, the Govt must chose one of the smaller Indian banks not having any branch in USA and then make all payments to Iran through it. As it is Bank of Iran has already been permitted to open its branch in Mumbai. We also need to negotiate with Iran for payment in rupees and barter trading.
