Indian trade delegation to Iran may ruffle feathers in US

India's announcement of sending a huge trade delegation to Iran may put the Indo-US ties under strain at a time when Washington is seeking international cooperation to put maximum economic pressure on Tehran to give up its nuclear programme.

Friends of India at the Capitol Hill termed the recent announcement by Commerce Secretary, Rahul Khullar as 'damaging' to the US-India relationship, with one of them describing it as a "provocative" statement coming in the immediate aftermath of Foreign Secretary Ranjan Mathai's Washington visit.

Mathai did a lot of explaining over India's position on Iran and the reasons for it continuing to buy oil from Iran during its recent visit to Washington.

It is understood that US officials yesterday cautioned India that it would be subject to American sanctions if New Delhi was seen in any way trying to bail out Iran from the tough economic situation it is in following the series of US-led international sanctions.

However, it said that bilateral trade items like food would not attract any sanctions.

"We have seen reports that an Indian official announced yesterday that India intend to increase commercial exports to Iran. Our goal is to reduce revenues that fuel Iran's nuclear activities, not curtail foodstuffs or humanitarian items for the Iranian people," a State Department spokesperson told PTI.

"The Iranian regime has a long history of deceptive business practices and we caution all countries against any interactions with Iranian institutions that could trigger sanctions or be misused by the regime," the official said in response to a question.

On Thursday, Khullar told media in New Delhi that "a huge delegation" would be going to Tehran at the end of the month to promote India's export to Iran.

The New York Times reported this item with the headline "India Explores Economic Opportunities in Iran, Denting Western Sanctions Plan".

"India emerged as a major new irritant on Thursday in Western efforts to isolate Iran, announcing that it was sending a large trade delegation there within weeks to exploit opportunities created by the American and European antinuclear sanctions that are increasingly disrupting Iran's economy," the daily said.

"A lot of damage is being done here by incoherent messaging coming from India," a Congressional aide said referring to Khullar's statement and the arguments being put forth by Mathai at the Capitol Hill early this week during his meetings with US lawmakers.

Officials here said following Mathai's visit, there was some understanding on India's compulsions on its trade relationship with Iran and the necessity to buy oil.

Mathai's argument that India needs to have a good friendly relationship with Iran so as to continue its developmental work in Afghanistan, which is being appreciated by the US, was taken positively by the lawmakers.

However, The New York Times article suggested that India is rushing in to to fill the vacuum being left by others, and is working towards "undermining US effort" which the Congressional sources said has made many lawmakers furious, even though it could not be the case in reality.

In fact, India is looking at various mechanisms – rupee payment, increasing export -- to pay for its oil import.

What has made lawmakers and policymakers upset is that the latest statements from New Delhi tend to send the message that India does not care for the US.

"Then it becomes unnecessarily provocative here," sources said.

"Friends of India in the Administration or on the Capitol Hill find it difficult to stand up for India," another source said.

"Commerce Secretary's words seem to have undone the impact of the Foreign Secretary's visit and his argument on Iran here," a Congressional source said.

"Indian Foreign Secretary Mathai's visit to Washington earlier this week was an opportunity to continue our conversations with India about Iran. Those conversations continue, both in Delhi and Washington," the State Department official said without going into the details of the nature and content of the conversation.

The official said the US continues to have a dialogue with India on the implications and intent of the Iran sanctions provisions in the National Defense Authorisation Act, 2012 (NDAA).

"India continues to be a valued partner in our common objective of preventing Iran from acquiring a nuclear weapon," the official said.

The United States welcomes the EU-India joint statement calling for Iran to take "constructive and immediate steps to meet its obligations to the IAEA and the UN Security Council," the official said.