India is willing to buy oil from its third top supplier- Iran, paying in rupees via state bank UCO, something that the US is unaware of. In the financial year till March 2018, India bought 114% more oil from Iran compared to the previous term.
According to the IMF, India has reached a GDP of $2.6 trillion which is more than France, Italy, Brazil, and Russia and is likely to grow a good 7% in 2018.
Earlier this week in New Delhi, India’s External Affairs Minister, Sushma Swaraj after meeting with Iranian Foreign Minister Mohammad Javad Zarif said, “Our foreign policy is not made under pressure from other countries … We recognize UN sanctions and not country-specific sanctions. We didn’t follow US sanctions on previous occasions either”.
There are a few factors involved making it important for New Delhi to buy Iranian energy. Apart from it being complicatedly connected to geopolitics and geoeconomics, there is also a pressure of bypassing Pakistan. Having India- Iran trade to be only $13 billion a year as compared to India- US trade amounting $115 billion a year is now a concern of national security to buy Iranian energy.
India and Iran already trade in Euros and their partnership revolves around energy, trade and investment connectivity corridors, banking, insurance, and shipping.
Prime Minister Narendra Modi’s energy strategy will require covering areas; solar, wind, oil and gas, keeping Iran in the center of planning. Also, New Delhi is supposed to import oil and gas from Turkmenistan via Iran and Kazakhstan.
The latest move by Washington flattering New Delhi has been to rename PACOM- the Pacific Command to “Indo-Pacific Command” which includes India, China, Mongolia, Southeast Asia, Australia, Antarctica, in fact, the entire Pacific Ocean.
The continuous trading of New Delhi with Tehran is yet to be responded over by the Trump administration. There has been constant pressure in case of Russia too which is also under sanctions that even led to encouraging India not to buy S-400 air defense systems from Russia.
However, New Delhi will declare its decision in October but the excuses related to the matter might “complicate interoperability” with the US forces. According to House Armed Services Committee chairman Mac Thornberry (R-Texas), this decision will have direct consequences over the “limit … the degree with which the United States will feel comfortable in bringing additional technology” into India.
On June 9, the Shanghai Cooperation Organization (SCO) summits in Qingdao, China, the issues are likely to be discussed in the presence of full members Russia, China, India, and Pakistan also with the current observers and certain future members Iran and Afghanistan.
One thing for sure is that China, Russia, and India, the fellow SCO/BRICS members would not allow Iran to get isolated, much to the perturbing of the Indo-Pacific Command.