Why India blew Hillary Clinton off about Iran

Secretary of State Hillary Clinton said in India on Monday that New Delhi can reduce its oil imports from Iran further, pressuring that country to fall in line with unilateral US sanctions and Washington’s virtual blockade on the sale of Iranian petroleum. India, however, pushed back, saying it would maintain its trade ties with Iran. Prime Minister Manmohan Singh offered an offset to his disappointing message to Clinton, however, pledging that he would open up ownership of retail businesses to foreign firms (at the moment retailers have to be 51% Indian-owned). US retail corporations are eager to get into the Indian market. I apologize for citing the tabloid Daily Mail here, but actually its story is much better and more thorough than most American outlets, who don’t mention that Singh told the Secretary of State “no” on Iran. The USA Today actually spoke about Iran’s “nuclear arms program” (which Secretary of Defense Leon Panetta says does not exist).

Also yesterday, a major Iranian trade delegation was in India, seeking to boost Iranian imports from India to $6 billion a year. Some Indian firms are afraid, but many see a rare opportunity here to expand their exports to Iran, filling the vacuum created by the increasing US and European Union trade boycott with that country. Those that are oriented in their trade to domestic markets or the rest of Asia might be especially bold in this regard.

Indian state-owned insurers are also stepping up to help insure the Iran-India oil shipping in the face of reluctance on the part of Western insurers.

So as to avoid having to use the international banking system, which the US Departments of State and the Treasury are bullying into declining to handle Iranian oil sales, Iran will accept rupees for much of its oil exports, and then recycle them back into India to purchase imports. The two are talking about trade in “agro and allied products, pharmaceuticals, engineering, shipping, banking, petroleum products polymer, textile, as well as e-commerce.”

Biased Western news outlets keep trumpeting that Iranian exports have fallen, presumably to shore up support for the unlikely idea that the US can unilaterally wish extra millions of oil onto world markets. Few bother to mention that they have fallen in the first two quarters of 2012 primarily because of an Iranian dispute with China over payment terms, delaying Chinese imports. But that dispute has been resolved. China’s oil imports are expected to rise 5% this year, and China will be back to importing a lot of Iranian petroleum soon. The Chinese are also about to deliver a new supertanker to Iran, the first of 12, which will increase Iran’s delivery fleet. And, Iran will accept Renminbi in payment for oil imported by China.

Alok Bansal has an excellent overview of Iran’s importance to India, and explains why Clinton’s pressure on PM Singh will almost certainly largely fail.

1. Iran is India’s gateway to Afghanistan, Central Asia, the Caspian Basin and the Caucausus since it is otherwise geographically blocked from these areas by Pakistan and China, its longstanding rivals. Some of these regions are resource rich, some are potential markets for Indian goods, and some are geostrategically important to India, a rising Asian power.


(modified from this site)

2. India’s Shiite Muslims and even Sunni Muslims reject the US boycott of Iran, and the ruling Congress Party has Muslims as one of its constituencies

3. India is growing rapidly economically and has very little in the way of hydrocarbons itself, and so is very thirsty for Iranian oil and gas.

Note that Saudi Arabia and the UAE are already pumping an extra 2.5 million barrels a day over what they were doing last year, and prices, while softening a bit on US and European slowdowns, are still historically high, suggesting that it will be very difficult for China and India to replace Iranian petroleum. The Sudan crisis has taken some supply off the markets and it could last a while.

18 Responses

  1. Just a note: No need to apologize for citing the Daily Mail there, when in fact the story comes from an Indian newspaper (a tab as well, but not in the British sense) called Mail Today, from the India Today Group.

    It only has a branding and distribution deal with the DM (including online, hence the website), with no editorial overlap.

  2. Dear Professor Cole

    The Financial Times adds to Secretary of State’s woes. Iran is now trading oil with China in Renminbi. link to ft.com

    The report states that much of the trade is being financed through Russian banks which take large comissions. Not much hope of separating the Russians and Chinese on Iran and Syria then.

    No need to apologise for the Daily Mail piece. At least it wasn’t “The Sun”. We are all, quite obviously, just as interested in Hilary’s Blazer and Sunglasses as in the geopolitics of the emergence of a new reserve currency. The photographs of celebs in their bikinis is just icing on the cake.

    Just in case people want to wash the ‘eye candy’ out of their eyes, here is a link to a paper on the economics of establsshing a new reserve currency. link to chathamhouse.org

  3. The America are just trying to deceive the world when it come to issue of Iran, America and the west are fighting Iran for their selfish interest, not for the interest of the world.
    Iran is a peaceful country but the America are trying to paint Iran as evil Country why they are the one.

    • “Iran is a peaceful country but the America are trying to paint Iran as evil Country why they are the one.”

      Are you kidding me. They helped the US in Afghanistan back then and now they fund anti-imperialist channels in Afghanistan. So, foreign Intervention is Ok for iran when it plays in Iran`s Hands. They played that game before in Iraq where they promoted “Democracy” after the “Intervention” while hypocritically dismiss it when it comes to syria. They want to create a great Persia from Afghanistan to Syria.

      • Maybe OG ment “peaceful” compared to us. You know, it’s been a long time since they invaded a country…

      • “great Persia?” Ooooh, Scary! that sounds like the Caliphate!!! Ooooh, wait – that’s an AYrab notion, not Persian!!! Ooooh, wait, that sounds just like the Dirty Red (remember how recently “conservatives” were supposed to rather be DEAD than RED?) Commyanists, who wanted to TAKE US OVER, just like the Pod People in “Invasion of the Body Snatchers!!!” link to en.wikipedia.org

        And back in the early ’80s, I attended a meeting of the Chicago Council on Foreign Relations, where Tariq Aziz spoke (anyone remember him?) and, to loud “American” applause, he told of the marvelous dream of a “Greater Iraq, “with somewhat elastic limits, destined to spread beyond the arbitrary colonialist straight lines in the sand. (This is back when “we” were sending “him” arms of all kinds, and other encouragements.) Ever heard of a lady named April Glaspie, carrying a Message from US to Saddam that “we take no position in your little Arab squabbles,” so help yourself to the oil fields of Kuwait? (Wiki has a nice loyalist take on that bit of history, link to en.wikipedia.org, which includes, in passing, the following sentence:

        The U.S. was concerned with Iraq’s position on Israeli–Palestinian politics, and its disapproval of the nature of the peace between Israel and Egypt.

        Huh.)

        And of course OUR sneaky-petes and other Great Gamers don’t have ambitions to spread the umbra of “American” hegemony, the “New American Century” thing, over not only the near and far east, but north and south too. The “end of history.” Maybe you heard of that “vision?” Maybe your tribal sense of belonging trumps any incentive to kind of see all the fine details in the Game board and all the actual moves in the play?

        Fellow citizen, “we” need to refine the terminology, and look up the word “reification,” which comes right after “hypostatization.” There’s a set of “they”s that run the international activities of this country, and a set of “theys” in Iran and the “People’s Republic of China” and Israel and North Korea and most every other one of the atavistic nation-state thingies that the real “they,” the Great Gamers, use to front their fallacies and fund their follies. “We” in our own glass house do not have a leg to stand on when it comes to throwing stones at others, given all the “initiatives” and “stratagems” that “we” or at least our “theys” have pulled off in service of corporate extensions and that the taking of that oldest and, in Henry “Great Gamiest” Kissinger’s immor(t)al phrase, “ultimate aphrodisiac,” power. “They” is not “us,” except via tacit, stupid, blindly enthusiastic and/or fearful acceptance and ratification. Not there, and not here.

        You got any idea how many sides of the polygon the Pod People in Rings of Power in the Pentagram, or down in Foggy Bottom, or at Langley, are on, in any one of the various “conflicts” that are running up the enormous MICtab, all across the planet? How often “our” Players have had weapons and “advisors” on both sides of murderous little wars and insurgencies? Care to review the bidding on “the US’s” military-political-economic involvement in Afghanistan, or Iran for that matter? Or do you have any problem with having “them,” stupidly, trying to buy the loyalty of Pashtun warlords with bottles of Viagra and crates of cash? Tell me why there’s thousands of Marines and dozens of US warships virtually invading Costa Rica, yet again? There’s a zillion examples of that kind of “they-ism.”

        You got kids? What kind of world do you want them to live in? An “American” world? But our rulers and our kleptocrats are all pretty much based just in the Imperial capital, “NYWash,” and elsewhere on the planet, and so very few of them even use the dream-word “America” any more — now it’s just “the US.” Except that “they” have nothing but contempt for “us.”

      • And are the 130 countries in which the United States maintains military installations a “Greater America”?

        A military base that implies the US will defend a government against its own people is one of the most serious forms of intervention; that’s why there have never been foreign military bases on US soil.

  4. All global oil production and discovery data shows that the global supply of oil is probably nearing peak production and that there is no more spare capacity.

    India would be foolish to decrease Iranian oil imports, especially since Iran is so willing to negotiate. Unlike China, India has not really invested in non-oil energy, so to keep its economy going, it has to import oil and why pay global oil prices when they can get all the oil they want from Iran at discounted prices. To get the discount, all they have to do is tell the US to go pound sand and that is easy to do.

    This is the BIG fallacy of the US blockade, oil has more buyers than sellers and Iran will always be able to find buyers. In the end all the US blockade of Iran accomplishes is the diplomatic isolation of the US as more and more countries discover they can spit on the US and get away with it.

    In the end, more and more countries are going to be willing to tell the US to go pound sand and the US will either have to change its terrible behavior (and throw Israel under the bus in the process) or lose more and more power. I suspect the new governments in Europe are going to be very willing to tell the US to go away and the US blockade of Iran will fall apart.

    Note that as the US blockade of Iran falls apart, the US will be forced to either attack Iran and suffer humiliating defeat or put a muzzle on Israel.

    We live in interesting times.

  5. Apart from the folly of trying to bully India to stop purchasing Iranian oil or to reduce the amount, these pressures clearly show the insincerity of the Obama Administration about wishing to resolve Iran’s “nuclear issue” in a peaceful manner. After the last round of talks in Istanbul, Catherine Ashton, the European Union’s High Representative for Foreign Affairs and the head of the 5+1 negotiating team with Iran, described the talks as “positive and constructive”. If the Obama Administration were really sincere about wishing to resolve Iran’s nuclear issue through diplomatic means and without resorting to a devastating war, it would ease up the pressure on Iran prior to the next round of talks in Baghdad on 23 May, and give the negotiators a chance to reach a mutually beneficial resolution to the dispute. Yet, for the past few weeks, Hillary Clinton, Time Geithner and the ever-present Under Secretary of the Treasury Stuart Levy, whose sole job both under Bush and Obama Administrations seems to have been to tighten the economic noose round Iran, have been running like headless chicken to various countries, especially to Japan, China and India, to persuade them to cut off trade links with Iran. Such efforts are nothing short of trying to create an economic blockade round Iran. Why should the Iranians trust the goodwill of the West in nuclear talks, when they see such frenzied activities by those who are allegedly trying to find a peaceful solution to the nuclear issue?

    The fact of the matter is that the Iranians and the Indians come from the same Indo-European stock. Their ancient Old Persian and Sanskrit languages come from the same root. They have had economic, cultural, political and social contacts with one another for thousands of years. Why should they sever those links in order to serve the short-term interests of Israel and its Western backers?

    • If the Obama Administration were really sincere about wishing to resolve Iran’s nuclear issue through diplomatic means and without resorting to a devastating war, it would ease up the pressure on Iran prior to the next round of talks in Baghdad on 23 May, and give the negotiators a chance to reach a mutually beneficial resolution to the dispute.

      I want to buy a car from this man.

  6. I’m admittedly torn here. If the sanctions work, it’s going to cause a lot of hardship for people in Iran.

    If the sanctions don’t work, I can see the bomb-Iran crowd using “See! We told you! Sanctions don’t work!” as yet another justification for bombing Iran.

    I recall that being one of their (many) reasons for attacking Iraq in 2003.

  7. You gotta love the Great GeoPoliticoEconomoReligioCorruptical Game, don’tcha?

    Let’s make treaties, with our noble cousins and correspondents, all over Europe and the Balkans, let the Speers and Krups and their “Allied” analogues loose in our treasuries, building engines of war. Then, when some butterfly’s wing beats in Sarajevo, treaty ties trump wisdom, the whole spindizzy lifts off, most of a generation dies in “the trenches,” bravely going, hopelessly, “over the top” with fixed bayonets into “interlocking fields of fire,” while gas shells and huge railroad gun munitions explode all around.

    Then, set the stage for the German Imperial Renaissance under GPERC Hitler’s gang. Poke at the “Japs,” whose GPERC rulers are doing the same selfish crap that “the West” has been doing, until Pearl Harbor flows into Tokyo Bay.

    Support the Kuomintang. Prop up Batista and a host of others. Install the Shah, like a high-end appliance. Manufacture reasons to let the puny little pencil-necks that are proud, PROUD, to call themselves “neocons,” let them play with their toy soldiers and trillions of our wealth in pursuit of another vain “end of history” moist dream. “Yellowcake” wars of choice. What at one point was going to be called “Operation Iraqi Liberation,” until some some highly paid Pentagram acronymist maybe noted that might give away the strategy…

    And now there’s this lumbering, aging, increasingly myopic elephant, stumbling through the landscape that eventually will eat its carcass, driven by an equally impaired mahout, tramping through the sorghum fields and flattening huts and walls and trumpeting “I’m Number One.”

    And Hillary, trailing treaties and fawning attendants, having inhaled the evanescent vapors of endless Powerpoints, and the heady smoke rising from hot briefing papers, and the skewed imagery from lots of maps, some of them like the one above, those maps that highlight “choke points” and various “axes of evil” and depictions of “national interest” as defined by the Few, a presentation leading to patterns of thought and behaviors that distill all the life and richness out of a complex world, down into simplistic visual slogans, a world full of people who try to make it all work, and people who just want the trappings of local and/or absolute power — Hillary goes to New Delhi, and says, “You gotta do what we tell you. Or there’ll be the severed head of your favorite horse in bed with you, some morning.”

    Do butterfies’ wings beat in New Delhi? or Hormuz? or in the contours of the “dashed line?” Are our “leaders” busily poking their “leaders” into a quantum jump in the global “arms business,” and more of the behaviors that are maybe survivable (for our species) when they occur at smaller scales, but are mortal when the market is the whole Flat Earth?

    Are US nukes targeted at Sao Paolo and Buenos Aires (no need to even ask about Teheran and Kabul, is there?) and such places, in the event that “things go South” as the elephant stumbles for the last time, to make sure the BRICs get blown out of the human edifice, too, as the US goes down?

    The truth is, like it or not, we humans are all in this together. And there’s enough of everything that matters, to go all the way around the table. If, IF, we can keep the Few from grabbing all but some crumbs and then suckering the rest of us into fighting each other over the scraps.

    “Can we all just get along?”

  8. Ancient Chinese curse: “May you live in interesting times.”

  9. Hillary must be getting tired of stamping her foot and demanding…

    Mr. Karzai you must end corruption and give women equal rights!

    Mr. Assad you must step down!

    India…You cannot trade with Iran!

    And their collective response…Yawn!

  10. @JTMcPhee

    Our modern history in a nutshell. It would make a wonderful panel of cartoons.

  11. The article certainly explains a lot & I found it very informative. It gives another point of view not currently being published by other newspapers.

    Iran is going to do what it is going to do. The U.S.A. should forget about trying to force Iran to do what the U.S.A. wants them to do. There are more important things in the world to worry about than does Iran have what it takes to build a bomb. If they really wanted a nuke they could possibly go to a former USSR states & find what they need.

    I don’t believe Iran will go out & nuke Israel or the U.S.A. They don’t have a death wish. They know they would be nuked in response. I’d be more worried about North Korea, who doesn’t have much to loose.

    Trade between India & Iran makes sense for both countries. Why insist India restrict access to markets for their goods. It is much more enviornmental to ship to Iran than it is across an ocean to north america or Europe.

    So far the U.S.A. has made a mess of Iraq. I’d suggest they don’t do the same to Iran.

    Iran has many problems but then so does the U.S.A. They might want to deal with their own problems first like their poverty, homelessness, deficeit, etc. Although the Americans like to point at the lack of rights for Iranians they should look at some of their own legislation which they have passed in the past few yrs. Their Patriot Act is so over the top, the invasive scans at airports, attempting to control women’s bodies, etc.

    There is no point in getting their things in a knot when currently Iran is not looking to shot up Israel. When they look like they are about to, then we get it together & shoot first, but until that happens everybody should just go home & clean up their own homes.

    • When they look like they are about to, then we get it together & shoot first, but until that happens everybody should just go home & clean up their own homes.

      You’ve got the right idea about people minding their own business. But there’s something very wrong with the first clause: it “looked like” Saddam was on a Yellow Cake Road to nuclear parity with the US and Israel, or maybe ready to deploy nasty bugs like the ones “our” and “our friends” are “studying” and stockpiling, or so we were told.

      We are told it “looks like” some of Iran’s leaders, just like their opposite numbers in Pakistan and Israel actually were, on a path to assembling nukes. “They” don’t hold referenda on these things, any more than “we” all voted for all-out Cold War or even thingies like invading Vietnam (though “we” were told of an incident in the Gulfo of Tonkin…) and Notagain?istan. And your formulation, that just assumes that Israeli rulers and all of the US are on the same fire team, takes a giant leap past what ought to be not only a Current Situation assessment of REAL US “national interests,” which is not what the paid shills tell us over and over and over, but an ongoing holding of our “leaders’feet to a very hot fire to induce them to do the things that day to day and over time actually reduce the trend toward a dead end for the whole species. Encouraging healthy economies. Increasing the participation in government. Obviating the need for hunger strikes and intifadas and for people like Nelson Mandela and Aung Son Suu Kyi and even Gandhi, and on a different scale, Bradley (“Who?”) Manning, to shame us and “them” into doing better.

      The trouble with leaving the “shoot first” machinery in place is of course that it encourages those Iranians who see how “we” play the Great Game to set up their own Doomsday Machine. And then you got the generals and colonels and “pundits” in their bunkers with their itchy tougher-than-you shiny pants, and a bunch of jumpy, testosterone-and-adrenlaline-pumped youngsters just ready to LAUNCH whatever weapons on whatever predetermined paths in response to whatever pre-programmed stimuli, given how short the horizon times are for anti-ship missiles and how invisible mines and submarines have become and how easy it was for a RETIRED Marine General, Paul Riper, to sink the 5th Fleet (in the 2002 Millenium Chllenge Game of “Battleship” — link to cuttingedge.org). Use it or lose it? Lose WHAT, again? Our whole species?

      (for the Reds among us, here’s another interesting, old-school take on that 2002 war game: link to cuttingedge.org)

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