March 22nd, 2012
10:22 AM ET

Iran: A test for U.S.-India relations

Editor's Note: Jeff M. Smith is the Kraemer Strategy Fellow and director of the South Asia program at the American Foreign Policy Council.  Sarah McKeever is a Research Associate at the Council.

By Jeff M. Smith and Sarah McKeever - Special to CNN

In the aftermath of the landmark U.S.-India nuclear deal passed in 2008, Washington and New Delhi have deftly navigated the periodic irritants that plague all great power relations.  Thanks to admirable efforts in both capitals, a post-nuclear deal hangover has not succeeded in fraying the bonds forged over the past decade, despite disputes over visa restrictions, lost arms contracts, and differences over America’s Af-Pak strategy.  But it was only a matter of time before India’s ongoing relationship with the Islamic Republic of Iran presented a materially more serious challenge to bilateral ties.  With the advent of spring, the West’s standoff with Tehran over its rogue nuclear program is heating up, just as India is testing new avenues for cooperation with the pariah regime.  Without serious attention from both sides, this disconnect risks creating an enduring rift between the world’s largest and oldest democracies.

New Delhi spent the better part of the 21st century performing a delicate balancing act with Iran.  On the one hand, India sides firmly with the international community in opposing Iran’s development of a nuclear weapon. Tehran’s passion for revolutionary Islamist fundamentalism is anathema to most Indians, as is the country’s periodic agitation over independence for Kashmiri Muslims.  And as an aspiring permanent member of the U.N. Security Council - and the current holder the body’s rotating presidency - India has an interest in establishing credentials as a responsible global power.

On the other hand, India is dependent on Iran for 10-12% of its oil imports and remains stubbornly tethered to Cold War principles of non-alignment. The specter of being painted as an American puppet still haunts Indian politicians. And New Delhi has a history of cooperation with Tehran in opposing the Taliban in Afghanistan and has sought to use Iran as an alternative trade and energy conduit to Central Asia, bypassing rival Pakistan.

India has tried to navigate these contradictions by charting a middle way. It has voted alternately with and against Iran at the United Nations and the International Atomic Energy Agency (IAEA); aligning itself with mandatory international sanctions on Tehran but straying from voluntary Western financial restrictions.  Until now, the tight-rope act has worked, thanks in no small part to a remarkably broad and bi-partisan pro-India caucus in Washington. But nothing quite excites passions in the nation’s capital like Iran’s rogue nuclear program.

On January 29, Indian Finance Minister Pranab Mukherjee provoked ire on Capitol Hill by proclaiming India “will not decrease imports from Iran,” during a two-day trip to the U.S.  The announcement was followed by news in early February that India was circumventing Western sanctions on Iran by paying for 45% of its oil imports in rupees and finding alternative ways to insure shipping lines transporting Iranian crude. In early March India dispatched Commerce Minister Anand Sharma to Iran with a large trade delegation of 70 business and government representatives. And on March 29 fourteen countries will meet in New Delhi in an attempt to revive the North-South Corridor, which could elevate Iran as a key transit hub for New Delhi’s trade with Eurasia.  Finally, in perhaps the most troubling development, the Indian government seemed to downplay Tehran’s links to a February 13 bomb attack in New Delhi targeting Israeli diplomats and bearing the hallmarks of Iran’s unique breed of state-sponsored terrorism.

U.S. Congressional leaders showered the Indian embassy in letters of protest.  Longtime Indophile stalwarts like Nicholas Burns, Under Secretary of State in the Bush administration, warned India that its government “is now actively impeding the construction of the strategic relationship it says it wants with the U.S.”  In Israel - by some counts India’s largest supplier of military hardware - questions were raised about the suppression of evidence in the New Delhi bomb attack.

Even India’s critics should sympathize with its economic conundrum. Bilateral trade with Iran now stands at $14 billion. As oil prices again top $100 per barrel, India remains hamstrung by refineries equipped specifically for Iranian crude. “An automatic replacement of all Iranian oil imports, is not a simple matter of selection, or a realistic option,” explains the Indian embassy in Washington. A challenging economic outlook further restricts India’s options: GDP growth for the last quarter was recently revised down to 6.1% while inflation remains too high, and FDI too low. The rupee fell 15% last year.

But these constraints do not absolve India from all responsibility.  New Delhi seems remiss in acknowledging that compelling Iran to abandon its nuclear program through economic pressure may be the best - and for some, the only - alternative to military force.  At the very least, New Delhi should strongly reaffirm its opposition to an Iranian nuclear weapon and follow through on a full and transparent investigation of the February bombing in New Delhi.  Recent breakthroughs in the case may conclusively implicate Iran, as details emerge about an Iranian terrorist cell with global reach.  (Thai authorities have already fingered Tehran for involvement in a similar attack launched in Bangkok the same day and Malaysian authorities have arrested an Iranian linked to the case).

Most important, India can begin implementing a strategy to reduce dependence on Iranian oil.  There are early signs this process is underway.  On February 23, Indian Oil Minister Jaipal Reddy said his country had requested that Saudi Arabia, India’s largest supplier of crude, increase oil shipments from 27 to 32 million tons of crude per year for 2012-2013.  In March an Indian spokesman admitted “crude imports from Iran constitute a declining share of India’s oil imports.”  Meanwhile, Indian refineries recently reported coming under pressure from the government to reduce imports of Iranian oil by 10%.  And India’s MRPL, the country’s largest refiner of Iranian oil, is reportedly planning a “drastic reduction in volumes from Iran,” from 150,000 bpd to 80,000 bpd.   "In a number of cases, both on their government side and on their business side, they are taking actions that go further and deeper than perhaps their public statements might lead you to believe," Secretary of State Hillary Clinton told a congressional hearing on February 28.

Washington should never shy away from making the Iranian nuclear program a high priority in relations with New Delhi, though it should recognize that on sensitive issues, diplomacy with New Delhi is always more effective through private channels.  India has never proven responsive to public demands. Better to offer the country further diplomatic and economic incentives to diversify its oil imports and upgrade its refineries. For its part, India, which has often received preferential treatment from the U.S., must better understand that Iran’s nuclear program constitutes a bold red line for many of its allies in Washington.  It will take sustained efforts from both sides to bridge the gap over Iran’s nuclear program and prevent Tehran from undermining this promising partnership.

The views expressed in this article are solely those of Jeff M. Smith and Sarah McKeever.

Post by: ,
Topics: India • Iran • United States

soundoff (48 Responses)
  1. Amin

    What a bunch of crock!
    a). India is an independent country not governed by the AIPAC led US Congress.
    b). Iran has not even decided to build a nuclear weapon. They have every right under the NPT to enrich uraniun for peaceful purposes. There has been no indication that they have done anything otherwise.
    c). Read the minutes of the recent site visit by IAEA and you will find that Amano pulled the plug of fruitful negotiations.
    d). Do you guys get paid by the Jewish lobby? A lot of fancy names to hide your real intent.

    March 22, 2012 at 11:02 am | Reply
    • Thinker23

      Well, if you believe that the US Congress is being run by AIPAC how come you do not think that the Indian Parliament IS NOT? Further, if you think that Iranian leaders did not yet decide if they're willing to build nukes you should have no troubles to explain HOW will they possibly use hundreds of itheir ntermediate- and long-range ballistic missiles that cost at least $3 million each and are virtually harmless without proper warheads. I'm all ears...

      March 22, 2012 at 12:30 pm | Reply
      • Mark Anthony

        Thinker 23, yes you are all ear and no brain at all. Had you read the article and understood(well how is that possible without brain) you would not have asked the 1st question. Answer to your 2nd question: your estimate of Iran's ballistic missiles is as accurate as mine if I say they have none, unless of course Ahmadinejad has personally told you that figure. Bad news for you blood thirsty war mongers is that Iran is not on the path to build the nukes as is confirmed in 2007 US intelligence estimate which represents common opinion of all the major US intelligence agencies. This estimate remains current upto this day. Even Israeli FM declared Iran is not pursuing to attain nuclear weapons.

        March 22, 2012 at 1:52 pm |
      • j. von hettlingen

        Relations between India and Iran have always been friendly both in ancient and modern times, although India didn't embrace the Islamic Revolution in 1979. The two countries cooperate in many areas and there are significant trade ties, particularly in crude oil imports into India. Realpolitik is on top of India's agenda, so it is not amused by the sacrifices it has to make by cuting cheap oil import from Iran. Yet it is rational player and is wary of its rise to power in the international community. So it walkd a tight rope in order to safeguard its interests without enraging the others.

        March 22, 2012 at 2:20 pm |
      • Vikram Rao

        You want to know how the Indian parliament is not run by AIPAC ? Because they do not have annual meetings of AIPAC in New Delhi thats why, now I hope that clears who runs who. I dont care if Iran bombs Israel, I care about America being dragged into an necessary war, our economy is suffering, our people are suffering and you want to go to war, please enlist with the Israeli army and go fight if you feel that strongly, keep India and America out of it.

        March 22, 2012 at 4:29 pm |
      • Thinker23

        Mark Anthony... Leaving my brain aside for a moment you're telling us that you're UNABLE TO ANSWER my first question. Regarding the second one are you telling us that Iran DOES NOT HAVE ballistic missiles???

        March 22, 2012 at 5:13 pm |
      • Thinker23

        Vikram Rao... AIPAC is an American organization. Indian Jews have their own organizations and their own annual meetings. Further, in case Iran will bomb Israel the US WILL most certainly be involved, do you like it or not. The alternative will be a large scale nuclear war in te Middle East that will throw the world economy into a crisis of epic proportions and will effectively end our civilization as we know it.

        March 22, 2012 at 5:45 pm |
      • Observer

        Jews are a minority in India, with almost no influence. Parsis/Zoroastrians ( whose ancestors had fled Iran (Persia) after Islam took over)) have considerable influence, being an affluent community.

        To anyone who's ever followed Indian politics, it's obvious that AIPAC, or any Jewish lobby has little influence there. Even Orthodox Hindus haven't succeeded much.

        It's difficult to influence a coalition govt made up of constantly bickering parties, which need to appease diverse votebanks and state govts. And, even if the lobby succeeds by greasing their palms, the strong opposition & regional parties would never let the Govt do what the lobby wishes.

        India wants both Israel & Iran to thrive, as it's close to both.
        Extremist Hindu fanatics identify with Israel's Anti-Islamic Zionists. (Thankfully, they aren't in power)

        But, one of the reasons it's refusing to impose sanctions is – to send a message to the US that it's not going to dance to its tune. Especially after a lukewarm relationship with the Obama administration (which continued to supply modern weapons and dollars to Pakistan)

        And, of course, for peace. A lot of Indians work in Iran...

        March 22, 2012 at 6:11 pm |
      • Observer

        ( Meant to say that the Parsis have more influence than Jews – though they aren't really passionately pro-Iran & Anti-Israel. They probably didn't even bother much)

        March 22, 2012 at 6:15 pm |
      • Thinker23

        Observer... I hope you've observed that Jews are a minority in the US as well.

        March 23, 2012 at 6:01 am |
      • Vikram Rao

        Your comments and paranoia are laughable, most Indian Jews have moved to Israel with a handful left. Jews in India are traders and Businessmen. You and KRM1007 should hook up and discuss your mind blowing theories. He thinks Pakistan has cut itself off from the subcontinent and has joined a new world order all I can say is WOW. You guys should share some of what ever you are smoking.

        March 26, 2012 at 10:28 am |
    • krm1007

      India has shown its true ugly colors to the world and the Indian government and people are not to be trusted. Indian history is full of lessons of hindu betrayal and double dealing. We need to wake up and learn from history in the western world.

      March 24, 2012 at 6:39 pm | Reply


    March 22, 2012 at 11:11 am | Reply
    • shahin


      March 22, 2012 at 5:39 pm | Reply
    • Mark Anthony

      Iran are terrorists, this is 'adult only' site. Under-thirteens are not allowed to post here. Please find some other site to practice your kindergarten writing.

      March 22, 2012 at 5:57 pm | Reply
      • Thinker23

        How old are YOU, 'Mark Anthony'? You're telling us that Iran DOES NOT HAVE ballistic missiles...

        March 22, 2012 at 6:03 pm |
      • Mark Anthony

        Tinker 23, I will not argue with you any further until you get a brain transplant. Sooner the better so that we may resume our lovely conversation.

        March 22, 2012 at 6:20 pm |
  3. Ron

    Iran should be melted into the sand to form one big sheet of glass now, while there is still time.

    March 22, 2012 at 12:07 pm | Reply
    • George Patton

      According to what you posted above Ron, one would suspect that you never got past the 5th grade in school. Did you, or are you just that full of hate? Besides, India is doing the right thing here. I only hope that they don't cave in to Washington.

      March 22, 2012 at 12:56 pm | Reply
      • Ron

        You are a lamb, a naive sad sap. I pity people like you.

        Why do you live here? If you support Iran so much, move there. You are here, you are the enemy from within.

        March 22, 2012 at 2:38 pm |
      • Mike

        Well stated this uneducated "RON" appears to be as dumb as wood, he probably has never left his own backyard. I find it more Ironic that CNN will condone this hate speech by allowing this to remain on their site.

        March 23, 2012 at 10:03 am |
      • Patrick

        Mike, you do understand that everyone can see what you are saying?

        March 23, 2012 at 9:25 pm |
    • Vikram Rao

      Arrogant, maybe you give the Iranians your address, let them melt your house into the ground with your whole family in it. Stupid post from a stupid stupid man.

      March 22, 2012 at 4:32 pm | Reply
    • Observer

      And then, despite comments like that, people cry that it's Iran that's planning a Holocaust... <_<

      March 22, 2012 at 5:57 pm | Reply
      • Thinker23

        Well, Iranian leaders have declared it on many occasions. Are you telling us that Iranian leaders are LIARS and that YOU know better what their plans are?

        March 22, 2012 at 6:04 pm |
    • Mark Anthony

      And you should be melted with mercury and painted behind that glass to turn it into mirror so that others like you could see their horrible faces and get frightened from themselves. Just kidding.

      March 22, 2012 at 6:08 pm | Reply
    • Reasonable1

      Melting the Iranian sand into a sheet of glass with a few nukes sounds like a very practical idea. You can then see through the sheet of glass where the oil is. That will save millions in oil exploration cost. Brilliant!!

      March 22, 2012 at 7:11 pm | Reply
    • Mike

      Hello!! CNN flag and remove this warmongering hateful idiot above. Oh wait it's not against Israel so the hateful idiotic rhetoric will stay.

      March 23, 2012 at 10:01 am | Reply
  4. Matt

    There is nothing new in the Indian stance while they want a strategic arrangement with the US they are worried about containment of India by the US, this can be seen by military procurements and bi-lateral military relations. They do not want to be reliant on the US for certain procurements such as the F-35, parts, servicing it is seen as a way to control India. Also sanctions with Iran are also seen as a way to contain India and China as a by-product via sanctions against them.

    March 22, 2012 at 1:40 pm | Reply
  5. amir

    What a hypocritical article. India has built nukes against NPT and Iran just performing its rights according to NPT.

    March 22, 2012 at 2:20 pm | Reply
    • shahin

      Brother, if the US just took a dump right in front of your nose and then denied ever doing it, the world would still believe them. Why? Because it's the US.

      Iran better prepare for war because minds have already been made up apparantly.
      They might as well start building those nukes lol. What's the dif?

      March 22, 2012 at 5:41 pm | Reply
      • Thinker23

        The BEST way for Iran to NOT be attacked is not to threaten or try to attack others. NO ONE will be willing to attack PEACEFUL Iran. On the other hand, the most reliable way for Iran to assure that it WILL BE attacked is to continue developing nuclear weapons while threatening to use them against Israel and other countries.

        March 22, 2012 at 5:59 pm |
  6. Ron

    Iran is devilish in their ways, in the padt taking US civilian embassy hostages, supporting all terrorists and stating implicitly that Israel "will be" wiped off the map, having no right to exist. Racism, fascism by the word of the Kuran. Sure, give them nukes and see the world go quickly to Armageddon. They don't value human life like the rest of cultures, including Russia and North Korea, as bad as they are, are even not close to this evil. Most Iranian people are good, but the rulers will send nukes in all directions. Don't be so naive, you must be of the ilk of Chamberlain when dealing with the Nazis.

    March 22, 2012 at 2:35 pm | Reply
    • George Patton

      Why is it Ron, that of all the countries to have nuclear wepons that we're the only ones ever to use them? In fact, Gen. McArthur wanted to strike China with them 1951 but Pres. Truman stopped him and then again during the Vietnam war when Vice Pres. Agnew urged Nixon to use them against North Vietnam. Because we had so many POWs there, Nixon backed out!

      March 22, 2012 at 5:08 pm | Reply
      • Marine5484

        You nailed it good, George! How true that rings!!! The right-wing fanatics in Washington do scare me, especially the trigger happy Republicans!

        March 22, 2012 at 7:42 pm |
    • Ron

      Nukes should be banned from the planet, they will in the end lead to all civilaztion's destruction. We are where we are at and the best is that we don't let it grow any more, staus quo has worked for now, no nuke attacks so far, just by pure luck.

      Let Iran get them and it's over. Just think about this question long and hard -WHY does Iran need nukes to begin with? To defend themselves against what? Is Israel going to invade? Or the US? Of course not. This where deductive logic prevails. Nukes are being developed for Iran on offense.

      March 23, 2012 at 9:16 am | Reply
  7. Benedict

    The strength of US/Israeli relations has always been strong and this is factored into some of the decisions that America takes in the Middle East; thus the tension with Iran, a long running foe of the Jewish nation. Now,as we've seen the last couple of years,Iran has secretly started a Nuclear program that they say is for peaceful purposes,but the manner they went about it has these nations in a jittery state,thus the sanctions against Iran. America has managed to get other Western and Arab allies to back these sanctions,while other like China and Russia have refused to join in. India as one of the emerging markets would definately have been approached by the White House to back this plan and as we have seen, they have continued their economic partnership with Iran. While it's the sovereign right of the Indian people to choose who they do business with, i can help but wonder how you can allow another nation to carry out attacks on your soil and still defend those who have caused human/structural damage to the people. A line must be drawn when a country believes that it can do these actions and get away with it the name of economic interdependence!!

    March 23, 2012 at 5:12 am | Reply
  8. krm1007

    India is playing a double game with USA in Iran. In fact, India has been double gaming USA everywhere. Not a trustworthy ally at all. That is why in the old days of USSR, India had been sidelined by them and kept mired in poverty. History repeats itself. US should rescind all technology transfer to India and rescind all Nuclear program agreements with India. The business community should also forthwith stop all FDI to India. Enough is enough and this double dealing by Indians will not be tolerated.

    March 23, 2012 at 9:27 am | Reply
    • Goes around comes around....

      And what USA has done to India by funding billions of $ and exporting weapons to Pakistan?...Goes Around Comes Around...

      March 24, 2012 at 3:37 am | Reply
      • krm1007

        This has nothing to do with Pakistan. This is exactly yhe reason Pakistan has disassociated itself from the subcontinent and become part of a new world order as the new gateway to Europe and Central Asia;. Leaving India to babysit Bangldesh and Burma.

        March 24, 2012 at 6:42 pm |
    • Frank

      India is no hurry to prosper nor it really wants to become internationally noticed and is ready to remain mired in poverty for ever. And if even that doesn't satisfy you and some other americans then finish it off!

      March 28, 2012 at 6:35 am | Reply
  9. Mark Anthony

    Thinker 23, leaving your brain aside what is left behind to argue with? I rest my case!

    March 22, 2012 at 5:39 pm | Reply
  10. Thinker23

    I see... So, you're unable to explain how will Iran possibly use hundreds of its intermediate- and long range ballistic missiles that are virtually harmless without proper warheads? Don't be ashamed, I can not answer this question either...

    March 22, 2012 at 6:07 pm | Reply
  11. Mark Anthony

    I said I rest my case.

    March 22, 2012 at 6:11 pm | Reply
  12. Mark Anthony

    Thinker 23, If it is about winning and loosing then let me say you win, I loose. But if you are seriously asking me to explain then you must be in a receptive mode: when you say Iran has hundreds of ballistic missiles you are making a wild guess which is as accurate as mine if I say they have none. This does not mean I am refusing to accept that Iran has ballistic missiles. I am only comparing the accuracy of two statements.more important than this is the fallacy of your assumption that nuclear warheads are the only warheads that can be delivered through ballistic missiles. There are other forms like conventional warheads which can be used. So your statement That because Iran has hundreds of ballistic missiles they must produce nuclear war heads to be delivered via these ballistic missiles is incorrect. Iran can use conventional warheads therefore, contrary to your assertion their ballistic missiles are not entirely useless. I hope you understand now but if you have further queries please do not hesitate to post your query. With best regards.

    March 25, 2012 at 9:24 am | Reply
  13. Thinker23

    Refusing to answer questions about your own claims is not exactly "resting your case", Mark... Unless by "resting your case" you admit that you do not have a "case", of course.

    March 23, 2012 at 6:04 am | Reply

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