Iran sanctions causes friction in India and US relations

WASHINGTON // Less than a year ago, Hillary Clinton, the US secretary of state, visited India and said the relationship between the world's two largest democracies would shape the 21st century.

India and the United States are now navigating some of the rockiest waters since they began to build closer ties in the late 1990s, with Washington weighing sanctions unless New Delhi significantly cuts oil imports from Iran.

No one expects a return to strained ties of the sort seen during the Cold War, when India tilted towards the Soviet Union. But the mood is palpably different from 2008 when the United States ended a three-decade ban on nuclear trade with India.

Trade between the two countries has soared over the past decade but also hit high-profile disputes. The nuclear deal, meant to symbolise the new partnership, has been at a standstill over an Indian law on disaster liability.

India in December backtracked on a plan pushed by the United States to allow foreign supermarkets such as Wal-Mart into the country after an uproar by its ubiquitous small-store owners.

But few issues have caused as much friction as Iran.

A new US law, seeking to pressure Iran to end a nuclear programme seen by Israel as a major threat, will slap sanctions starting on June 28 on banks from countries that do not cut oil imports from the Islamic republic.

In public, US officials have played down differences and echoed Mrs Clinton's July 2011 speech in Chennai where she urged a greater global leadership role for India.

In a speech last month in Washington, the Indian ambassador Nirupama Rao said New Delhi's foremost foreign policy task was to promote the transformation of its economy and said that its share of oil imports from Iran was declining.

India historically has strong relations with Iran and relies on Tehran to ship assistance to Afghanistan, where New Delhi has been one of the most enthusiastic supporters of US-led efforts to fight the Taliban.

The main concern for policymakers in New Delhi is not Iran but Pakistan - which has a long-standing, if uneasy, partnership with the United States and where a number of anti-Indian militants operate openly.

Walter Lohman, the director of the Asian studies centre at the conservative Heritage Foundation, said that Japan and other US allies have taken actions such as sending troops to Iraq out of consideration for ties to Washington.

But Mr Lohman said the United States had nothing to show for its efforts on India and called it "crazy" to support a permanent Indian seat on the UN Security Council - as President Barack Obama pledged on a 2010 visit to New Delhi.

"If our partnership can't support an effort to bring maximum pressure to bear on Iran over its nuclear programme, I don't see what it can possibly support," Mr Lohman said.

But Daniel Twining, a fellow at the German Marshall Fund of the United States, said the US relationship with India was based on a longer-term view that a stronger, more prosperous "giant democracy" was in the world's interest.

Mr Twining said the United States should not be surprised to deal with a nation that "believes its own virtues are supreme and thinks it should pursue its own interests to the detriment of whatever else anyone might say".

"Most countries in the world are used to dealing with a country like this - it's just that they're dealing with us," he said.