India Intelligence Report



   US Warning over India-Iran Relations

  As pointed out in previous editions, the US has politely reminded India about a decade old legislation that could impose punitive sanctions against any country entering substantial business ties with Iran.



Hot Topics

The Indian Economic Miracle
Indian Role in UN Peacekeeping
Nepal Constitutional Crisis
North Korean Nuclear Program
Resolution of Kashmir Dispute
Global Warming
Indo-Iran Relations & US


Other Stories

GDP Growth Projected at 9%, RBI Hikes Rate
Indian Women Keeping Peace
Nepal Protests Continue
NK Warns Second Nuclear Test
Optimism on Kashmir
Scientists Fear Antarctica Damage

As pointed out in previous editions, the US has politely reminded India about a decade old legislation that could impose punitive sanctions against any country entering substantial business ties with Iran. On the eve of External Affairs Minister Pranab Mukherjee traveling to Tehran to boost a failing relationship and also close the Iran-Pakistan-India (IPI) pipeline, US Ambassador to India David C Mulford revealed that he has "drawn the attention of the Indian Government to" the Iran Libya Sanctions Act (ILSA). The ILSA is an American law that can impose sanctions on any country or company that has more than a USD 40 million business deal with Iran or Libya.

Mulford's contention was that since the deal was large and even though "nothing concrete has happened," New Delhi needs to be aware of this law. The US had warned former Petroleum Minister Mani Shankar Aiyar on this law. Mulford conceded that the law had never been invoked.

However, Mulford was quick to say that Mukherjee's Tehran visit will not affect Washington's relationship with New Delhi. India has already demonstrated clearly that it does not see positive development in Tehran's nuclear enrichment program by voting thrice against it at the International Atomic Energy Agency (IAEA). However, many lawmakers in the US had wanted an inclusion of a binding clause requiring policy alignment from New Delhi with Washington's view on Iran which was later withdrawn since it was a sure "deal-breaker" clause. A recent US legislation allowing the US President to impose punishment by the Administration on countries that abet nuclear proliferation or those who cooperate with the proliferating nations can also be easily twisted to show that India is collaborating with Iran which the US accuses of terrorism and proliferation.

India is downplaying these statements and the visit saying that the February 6-7 visit is "part of a regular process of high-level exchanges between the two nations" and has not responded to Mulford's statements. However, any government in New Delhi will find it impossible to comply with extremist US position on Iran. While India agrees with the US on dangers of nuclear proliferation, more nuclear weapons states, and global terrorism, it differs sharply with Washington on the definition, scope, interpretation, and methodology to be used to deal with these subjects.

It is not just India that differs with the US on these issues. While co-security council veto partners Russia and China with large business interests in Iran have resisted Washington's aggressive posturing against Iran, the latest to join the ranks is France. In an interview with The New York Times, The International Herald Tribune, and Le Nouvel Observateur President Jacques Chirac said that Paris will not have a problem if Tehran had one or two nuclear bombs as long as it was not used against Israel. Chirac had also predicted that if Iran were to obtain a bomb, Saudi Arabia and Egypt may follow suit. Even though he quickly retracted the earlier statement, the gaffe pointed to growing differences within the North Atlantic Treaty Organization (NATO) alliance over Iran. Coming from France, one of EU-3 that took Iran to the IAEA and the UN, the vastly variant policy was a surprise that must have shocked Washington.

Even within the US, a number of lawmakers from both parties are increasingly opposed to Washington's aggressive Iranian policy. A few weeks ago, the Democratic controlled Congress passed a non-binding resolution banning military action against Iran. An influential Republican Senator Arlen Specter also questioned the veracity of US Administration assertion that the military is under the sole control of the President. Another Republican Senator John McCain publicly questions the handling of the Iraq operations.

Washington's reminder to New Delhi is also ill-timed coinciding with rising trust of the US within India, the continuation of discussion of the "1-2-3 Agreement" in Washington, and a possibility of rapprochement between India and Pakistan using the IPI pipeline as a ruse. It is also a hollow threat since many nations including many of NATO allies (France, Germany), Russia, and China have massive investments in Iran. Singling out India to refrain from investments adds fuel to the communist argument in India about collaborating with the US and empowers forces that oppose the historic Indo-US Civilian Nuclear Deal. A year ago, Mulford's comments on trying to contain India's independent foreign policy by linking {US opposition to Indian investments in Syria [Insert US asks India Reconsider Syrian Investment]} and the nuclear deal took a beating on the streets, in the Parliament, and among think tanks in India. Even at that time, {India dismissed the linking of the nuclear deal with its Iran policy [Insert India Rejects Mulford Iran Link]}.

As stated by India at that time, Mulford's comments on the IPI deal are "inappropriate and not conducive to building a strong partnership between our two independent democracies."