Israel sees gradual increase in Indian steps against Iran

India bars firms from dealing with Iran through Asian Clearing Union; gov't officials in J'lem say move represents "positive trend."

By
December 30, 2010 20:46
2 minute read.
Driver fills gas in central Teheran

India gas 311. (photo credit: AP)

 
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India’s recent decision to take steps tightening sanctions against Iran is seen in Jerusalem as significant and a sign of an evolving attitude in New Delhi toward Iran.

Teheran on Wednesday refused to sell oil to India because of new rules instituted by New Delhi to prevent Indian business from doing illicit business with Iranian companies. Officials from the central banks of both countries are expected to meet Friday to discuss the new regulations.

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Teheran on Wednesday refused to sell oil to India because of new rules instituted by New Delhi to prevent Indian business from doing illicit business with Iranian companies. Officials from the central banks of both countries are expected to meet Friday to discuss the new regulations.

Government officials in Jerusalem said that the Indian moves represented a “positive trend” in that country’s relationship with Iran, one that began before US President Barack Obama went to India in November.

Obama’s visit helped the trend, the officials said.

India, which imports 400,000 barrels of crude oil a day from Iran, took action this week barring companies from dealing with Iran through the Asian Clearing Union (ACU), a financial clearinghouse that includes the central banks of India, Bangladesh, Maldives, Myanmar, Iran, Pakistan, Bhutan, Nepal and Sri Lanka.



This clearinghouse allows central banks to handle payments to their countries’ companies, and – according to a Wall Street Journal report – makes it possible to obscure which firms are doing business.

The US Treasury has regularly raised the issue with India, and discussion on this matter accelerated after Obama’s visit, when he endorsed permanent membership for India on the UN Security Council, the Journal said.

The US has told New Delhi that Indian firms conducting transactions through the ACU run the risk of violating a US law signed in July banning international firms from doing business with 17 Iranian banks and much of Teheran’s oil and gas sector, as well as the Revolutionary Guard, according to the report. If Indian companies are found in violation, they could be banned from doing business in the US, the article said.

While India imports about 14 percent of its crude oil from Iran, down from some 16.5% in 2009, it is believed to provide about 40% of all the refined oil used in Iran. The UN sanctions adopted this summer neither forbade purchasing Iranian oil, nor placed a ban on selling refined oil back to Iran.

Indian-Iranian relations go back centuries, and the US-led effort to get the world on board with sanctions against Iran have not been enthusiastically greeted in India, where there are both huge economic ties as well as common geopolitical interests. For instance, India and Iran have worked together in the past against the Taliban in both Afghanistan and Pakistan.

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