- The Washington Times - Sunday, June 10, 2012

The third U.S.-India strategic dialogue gets under way in Washington this week as the Obama administration considers imposing sanctions on the South Asian nation for importing oil from Iran.

The United States wants India to end its dependence on Iranian oil and train Afghan security forces as the U.S. seeks to deepen its relationship with a nation it considers a linchpin of its new defense strategy in the Asia-Pacific region.

India’s oil imports have been a source of frustration in Washington as the U.S. pressures Iran to dissuade it from developing nuclear weapons. Iran says its nuclear program is intended for peaceful purposes.

Timothy Roemer, who served as the U.S. ambassador to India until April, says India and the U.S. are on the same page when it comes to checking Iran’s nuclear ambitions.

India has been cooperative and helpful, both to the United States and to the world community, on tightening sanctions on Iran,” Mr. Roemer said.

“They have cast some very difficult and very important votes in the [International Atomic Energy Agency] on tightening sanctions, have publicly committed that they do not want to see Iran get access to a nuclear weapon, and have significantly decreased their oil importation from Iran. Those efforts should be applauded.”

Indian officials say that their country has made significant cuts to its imports but that it is unrealistic to expect a total reduction overnight. In 2008-09, the percentage of India’s crude oil imports that came from Iran was 16.42 percent. By 2011-12, that number dropped to 10.29 percent.

Besides India, 11 countries, including China, South Korea and Turkey, face U.S. scrutiny over imports of Iranian oil. The sanctions will go into effect June 28 unless the Obama administration gives a waiver to countries that have shown an intent to significantly cut these imports.

The sanctions are against any transactions with the Central Bank of Iran by any private or public financial institution, and are related to the purchase of petroleum or petroleum products from Iran.

Strategic pillars

Secretary of State Hillary Rodham Clinton exempted 10 European nations and Japan from sanctions in March because they had reduced their Iranian oil imports significantly.

Mrs. Clinton and Indian External Affairs Minister S.M. Krishna will co-chair the strategic dialogue on Wednesday.

The dialogue is based on five pillars: strategic cooperation; energy and climate change; education and development; economics, trade and agriculture; and science and technology, health and innovation.

Afghanistan will be at the top of the agenda as a NATO deadline to withdraw all its combat troops from that country by the end of 2014 draws near.

“Any discussion of our strategic ties must begin with Afghanistan,” Robert Blake, assistant secretary of state for South and Central Asian affairs, told an audience at the Carnegie Endowment for International Peace on Thursday.

The U.S. wants India to play a bigger role training Afghan security forces.

“There is a recognition that the Afghan security forces can benefit from training inside India,” U.S. Ambassador to India Nancy Powell said at the Center for American Progress on Friday.

India has committed more than $2 billion in assistance to Afghanistan since 2001. It helped build the Parliament building in Kabul, is building roads and training Afghan officials, and will invest billions of dollars to develop the Hajigak iron ore deposit 60 miles west of Kabul.

India and Afghanistan also signed a strategic partnership agreement last fall.

Enter Pakistan

“We are doing the best we can in the circumstances,” said Ronen Sen, a former Indian ambassador to the U.S. “We could have done more if transit facilities had not been denied by Pakistan.”

Pakistan, which has fought three wars with India since winning independence from Britain in 1947, is suspicious of India’s role in Afghanistan.

“If there is not some understanding reached between Pakistan and India, there will be no long-term stability in Afghanistan,” said Karl Inderfurth, a former assistant secretary of state for South Asian affairs.

India fully recognizes that at some point India and Pakistan must find a way to discuss Afghanistan’s future and each country’s mutual interests and suspicions of the actions of the other.”

The Obama administration, which is developing a defense strategy that involves focusing on the Asia-Pacific region, sees a key role for India.

“Defense cooperation with India is a linchpin in this strategy,” Defense Secretary Leon E. Panetta said in a speech in New Delhi on Wednesday.

The Obama administration has proposed a U.S.-India-China dialogue to allay concerns in Beijing that the new defense strategy represents an attempt to contain China’s rise.

Economy and trade

The U.S.-India relationship is marked by opportunities and challenges, particularly on the economic side.

“It is no secret that there are some challenges now in India in terms of moving forward with the economic reform program,” Mr. Blake said.

U.S.-India defense trade has surpassed $9 billion in the past five years. Even though bilateral trade in goods and services is on track to reach a new high of $100 billion this year, U.S. trade is falling as a percentage of India’s overall economy.

“This means India is moving ahead in its economic relations with other countries, and even though the aggregate volume for the U.S. is going up, its percentage is going down,” said Mr. Inderfurth, who is currently at the Center for Strategic and International Studies.

“A bilateral investment treaty can help get more American investors and traders interested in India and vice versa,” he added.

The U.S. and India are in talks to finalize a bilateral investment treaty that would accelerate investment flows, create jobs and generate growth.

U.S. firms also stand to gain as India plans to spend more than $1 trillion on infrastructure in the next five years. However, the pace of economic reforms — key to unleashing the true potential of the U.S.-India relationship — has slowed.

Indian Prime Minister Manmohan Singh, in the role of finance minister in the early 1990s, was the architect of his nation’s economic reforms.

“We are hopeful to see that Manmohan Singh return and open up markets, retail markets, banking markets, infrastructure opportunities for U.S. businesses so they are not discouraged from competing for infrastructure projects like current law often does in India,” Mr. Roemer said.

A civilian nuclear deal initiated by the George W. Bush administration also has stalled.

“We have seen a historic and very important [civil nuclear] agreement go backwards in some ways with the [Indian] Parliament passing liability legislation that turned the law upside down,” Mr. Roemer said.

Some analysts interpret these developments as a sign that the U.S.-India relationship has gone adrift.

Mr. Blake rebuts the suggestion: “The U.S.-India partnership is much more than a quest for ‘the next big thing.’”

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