India resists US pressure to cut energy ties with Iran

Resisting US pressure to further scale down oil imports from sanction-hit Iran, India on Monday made it clear that it has to look at the issue involved beyond the energy trade as it has "vital" security stakes in the Gulf region.

After talks with US Secretary of State Hillary Clinton during which she asked India to restrict its trade and energy ties with Tehran, External Affairs Minister S M Krishna said,

"I conveyed our vital stakes in peace and stability in the Persian Gulf and wider West Asian region, given the six million Indians who live there and the region's importance to our economy."

Clinton, who is here on her last leg of three-nation Asia tour, has been pressing India to "do more" to scale down its oil imports from Iran to keep pressure on Tehran to meet international demands on its disputed nuclear programme.

Addressing a joint press interaction, Krishna said, "Iran is a key country for our energy needs but we have to look at the Iran issue beyond the issue of energy trade. In the first place, we have to see security and stability in the Gulf region, India has vital stakes in Gulf region...

"It is one of the critical destinations for our external trade," he said, while noting that India's exports to that region was about $100 billion and oil imports stood at 60 per cent.

India has been asking Tehran to abide by its international obligations as non-nuclear weapons state under the Non-Proliferation Treaty but has maintained that it has a right to pursue nuclear activities for peaceful purposes.

"We also discussed the importance of peaceful settlement of the Iranian nuclear issue through dialogue and negotiations, based on the position that Iran has rights as a member of NPT, but it must also abide by its obligations as a non-nuclear weapons state under the NPT," Krishna said.

The minister also noted that "the issue (Iran) was not a source of discord" between the US and India.

Maintaining that only a "continued and relentless" pressure on Iran on its nuclear programme will bring it to the "negotiating" table, Clinton said both the US and India have same goal of preventing Tehran from acquiring nuclear weapons.

"The best way to achieve this diplomatic tool, that we all seek, is for the international community to stay united and to keep the pressure that has brought Iran back to the negotiating table... till we reach a peaceful resolution," she said while noting the efforts of P5+1 (Britain, France, Russia, China and the United States plus Germany) to engage with Iran.

She also welcomed the steps taken by the Indian refineries (companies) to reduce the import of oil from Iran while asserting that US believes that any "easing or waiver" in the international pressure will fail to bring Tehran to the negotiating table.

India's top oil importers have reduced Iranian oil imports by 15-20 percent. Crude imports from Iran fell to 18.5 million tonnes in 2010-11 from 21.2 million tonnes in 2009-10.

Last fiscal (2011-12), Iranian oil imports dropped to less than 16 million tonnes. This year they may further come down to 14 million tonnes.

India's top importers - Mangalore Refinery and Petrochemicals Ltd (MRPL) and Essar Oil-- have plans to cut Iranian oil imports this fiscal. MRPL plans to reduce Iranian oil buy to less than 100,000 barrels per day from 142,000 bpd while Essar Oil plans a 15 per cent cut to 85,000 bpd from 100,000 bpd.

Clinton said the US is also working with India to enhance alternative energy sources and in this regard US Energy Coordinator Ambassador Carlos Pascual along with an expert team will visit India next week for further discussion.