In “The Case for Indian Islam,” I discuss how India’s Muslims have lived under stable, pluralist democracy for decades, and argue that they ought to reclaim their syncretic narrative and project it to the rest of the Islamic world. This narrative is particularly important during this time of tumult, awakening, and recalibration in the Muslim world known as the “Arab Spring”.

The piece is available at http://pragati.nationalinterest.in/2012/11/the-case-for-indian-islam/ and in-text below.

The case for Indian Islam

by Neil Padukone — November 30, 2012 4:51 pm

India’s Muslims have lived under stable, pluralist democracy for decades. They ought to reclaim their syncretic narrative and project it to the rest of the Islamic world.

For years, much of the Islamic world has been aflame in conflict. Vali Nasr was among the first to describe the modern civil strife within Islam, between Shi’as, represented by Iran and its affiliates on one side, and Sunnis, represented by Saudi Arabia and its subordinates, including Pakistan and militant groups therein, on the other. Petrodollars (or Riyals) from both blocs are underwriting the proxy wars that have taken shape in the Levant, Iraq, Central Asia, the Arabian Peninsula, and increasingly in the Indian Subcontinent.

Each misrepresents the essence of Sunni and Shi’a Islam, instead putting forth messianic narratives of Islamic revivalism that serve the narrow geopolitical aims of Riyadh and Tehran. More recently, these forces have been trying to co-opt the Arab Awakening and the introspection therein that has at its heart, questions of how Islam can be reconciled with nationalism, justice, democracy, economic growth, and other religions.

Amidst all this, nearly 170 million Muslims have survived under a stable, pluralist democracy without compromising their own religious practices or that of the other faith groups amongst them. These Muslims, of course, live in India. Until recently, there were more Muslims in India than in the Islamic Republic of Pakistan, and more than in any other country in the world except Indonesia. And they have lived and participated in nearly uninterrupted democratic rule since 1947.

There was, of course, disorder when Islam came to the Indian Subcontinent from Persia in the 1200s. Geopolitical conflict between warring Hindu and Muslim kingdoms spilled into local religious strife, which continued into the twentieth century in the form of political division, communal rioting, and violent militancy.

But, though there was divergence between Hindus and Muslims and even Sunnis and Shi’as in the subcontinent, they have historically negotiated an inclusive syncretism that enables anekta mein ekta- unity in diversity. Through interaction with local traditions in India, Islam gave rise to a syncretic, uniquely subcontinental culture of philosophical exchange.

The intermingling of Islam and Hinduism in the 12th century produced a profound evolution in Hinduism that remains salient today. Before Islam, Hinduism professed that common people need an intermediary to God, and that the only person who could enter a temple to facilitate that relationship was the priest or Brahmin. Islam, however, introduced the idea that the rapport between man and god was personal; that all are equal in worship. That intellectual challenge from Islam reformed Hinduism and produced the Bhakti movement, which argued that Hindus of all castes could worship in their own mandirs, conduct their own pujas, and practice religion, the way they wished; it brought about the more equitable realities of modern Hindu worship.

Meanwhile, Hinduism had an equally profound effect on Islam in the subcontinent, through the resonance and development of various tariqas of Sufi Islam. Sufism emphasised the mystical, aesthetic, and spiritual dimensions of religion over more rigid exoteric dogmas. This brought about a shared cultural space in which practitioners of many religions worshipped at the same shrines, revered the same saints, and even performed the same rituals. The North Indian Nawabi culture, in which Hindus and Muslims greeted one another in the Persian greeting “Khuda Hafiz,” wrote in the same scripts, and spoke the same Hindustani language, was ubiquitous.

Admittedly, the historical record is pocked with a few more marks, and many of these ideas are more in synch with India’s historical narrative- best personified by Bollywood- than its daily practice. Everyday realities included distrust based on a lack of social integration (exacerbated by the British Raj’s decision to divide communities into religious electorates), and the riots that wrought havoc upon pre-independence India. It was this reality from which partition was meant to protect the Muslim minority of the subcontinent.

But instead, the syncretic, Pan-Subcontinental Islamic narrative that did exist was weakened when the region was divided into religious sectors in 1947. Fundamentalist Muslims in Pakistan and extremist Hindus in India tried to define their new national identities in opposition to what had been.

Many Pakistanis, notably President Zia ul-Haq and his allies in the Jamaat-e-Islami, sought to import and impose ‘purer’ Wahhabi and Arabian Islamic customs in an effort to contrast Pakistani religious identity with the rest of the subcontinent’s Hindu influenced Sufi Islam. In India, post-partition accusations of being a fifth column for Pakistan- along with demands from right-wing Hindus that Muslims in India behave as ‘Hindu’ Muslims- weakened the self-confidence of the remaining Indian Muslims, who came to fear exerting their own Islamic identities. Muslims seeking employment went so far as to adopt Hindu names in order to gain acceptance by the mainstream. Electoral democracy has absorbed some of those strains by ensuring political rights and representation, but exacerbated others through vote-banks that empower conservatives who claim to represent their communities. This is to say nothing of the all too high tolerance for communal violence across the region.

These tensions on both sides of the border are worsened by the influence of Saudi and Iranian Islamist doctrines that have contributed to a rise in not only sectarian polarisation, but also in its violent manifestations. Tehran has had a hand in Shi’a riots in north India, not to mention an alleged link to a bombing plot in New Delhi and to militants like Sipah-e-Mohammad Pakistan. Riyadh, meanwhile, has even more vast networks of influence through organisations like the Students Islamic Movement of India (SIMI), Jamiat-Ahali-Hadith in Kashmir, Pakistan’s Lashkar-e-Tayyiba, and even Jamaat-e-Islami, the Deobandi Movement, and thousands of subcontinental pilgrims and migrant workers. India faces the added dilemma that purchasing energy from these countries ultimately empowers these forces, weakening India’s own safety as well as its narrative of Islamic inclusivism.

Yet, while the state of Indian Islam has been held back by Hindu chauvinism, the psychological challenge of Pakistan’s existence, andstructural injustice, many Indian Muslims have been anything but impotent. Names like Khan, Azim, Mirza, Kalam, and Hussein excel in Indian art, business, sports, science, and politics. And institutions like Chishti, Barelvi, Jamia Millia Islamia, and Aga Khan have contributed to the uplifting of millions in the country and beyond. Yet in one of the most consequential geopolitical and ideological tussles over the soul of Islam that is taking place in Arab streets, subcontinental Muslims, who have a centuries-old legacy of religious pluralism and decades of experience with electoral democracy, have almost no voice.

Indian Muslims must comfortably reclaim their subcontinental Islamic identity without relinquishing their national character, and proffer their narratives in a way that helps their coreligionists around the world. This projection could never be a state-led endeavor: just as India’s other “soft power” assets- from economic investment to ‘democracy,’ Bollywood, and food- are largely bottom-up, religion can be nothing but.

Yet environments that enable it to flourish can be encouraged. A big step forward is that the psychological baggage of partition is slowly being overcome, with the ageing of the partition generation as well as a burgeoning détente and era of conciliation with Pakistan. The public sphere, meanwhile, is an increasingly safe space for Indian Muslims to demonstrate their own internal heterogeneity: from proudly voicing their Islamic heritage, to vehemently disagreeing with elements of it, to ignoring it altogether. This diversity demonstrates that Indian Muslims are anything but monolithic- that hybrid identities prevail and Islam easily coexists with other economic, social, and political values. In other words, it demonstrates that syncretic Indian Islam is alive and well.

Pratap Bhanu Mehta writes that Indian artists, “entrepreneurs, engineers, bankers, investors, traders, and guest workers may not…be thought of primarily as “democracy promoters”…but they will by their mere presence contribute to the opening of societies—not least in the Middle East.” As the Islamic world contends with challenges of development, democratisation, pluralism, and political upheaval, Muslims around the world ought to remember the legacy of subcontinental Islam.

Neil Padukone is Fellow for Geopolitics at the Takshashila Institution

It explores a potentially important role India is playing in the political and economic development of Africa, particularly South Sudan’s development, burgeoning independence, and peace process. The article is available here and below.

India’s involvement in the Sudan

in Roundup by Neil Padukone — September 17, 2012 at 4:31 pm | 0 comments

India’s engagement in the Sudan—from investments in energy infrastructure to its involvement in a peace process between Juba and Khartoum—demonstrates an important union of New Delhi’s strategic interests and ‘soft’ power.

From 2004 to 2009, mass killings that the United Nations called ‘genocide’ raged in the Darfur region of Western Sudan. In response to a local uprising by Darfuri rebel groups in 2003, the Sudanese government in Khartoum, led by Omar Al-Bashir’s National Islamic Front party, launched a retaliatory counter-insurgency. Bashir recruited Arab horsemen or ‘Janjaweed’ from northern and central Sudan to attack Darfuri civilians in order to catch the few insurgents among them, in a policy that was likened to “killing the fish by draining the water.” Over the course of five years, upwards of 400,000 people died of mass homicide or forced starvation and three million were displaced. Janjaweed incursions spread westward into Chad, turning the domestic genocide into an international war. Meanwhile, Khartoum denied aid workers access to internally displaced person (IDP) camps, exacerbating the humanitarian crisis.

When the United States, European Union, African Union, United Nations, and Arab League sought to intervene to prevent further atrocities, countries like China and Russia prevented any external intervention in Sudan from coming to fruition. Beijing and Moscow used their clout in the UN Security Council to veto any resolutions calling on intervention or otherwise condemning Khartoum. China’s National Petroleum Company—along with Malaysia’s Petronas, Qatar’s Gulf Petroleum Corporation, and other companies—had large investments in Sudan’s energy sector, and hoped to keep their investments intact. Sudan was among the fastest growing oil markets in Africa, with 75 percent of the region’s reserves located in southern Sudanese provinces (delineated in red on map).

The link between petroleum and conflict in Sudan has been strong. On one hand, out of a desire to exploit potentially oil-rich land, Khartoum has displaced local populations of different regions in order to explore oil possibilities. These displacement campaigns have resulted in large-scale humanitarian crises such as mass murder, internally displaced persons (IDPs), civil strife, disease and starvation.

On the other hand, Khartoum has spent nearly 80 percent of the revenue it has received from petroleum and other energy based infrastructure—which makes up the majority of its international trade—on aircraft, weapons, and other military equipment from China and Russia so that indigenous militias can ‘protect’ oil development projects from Sudan’s own civilians. The aircraft and helicopters used in Sudanese Air Force air strikes on Darfuri villages, as well as the Kalashnikov and machetes used by the Janjaweed after the air raids to destroy what is left, are largely of Chinese origin, purchased from oil revenue. These had been common practices since the 1970s, when then-President Ja’afar Nimeiri granted large oil concessions to the oil companies Chevron and Total, and focused his military campaign on southern Sudan.

From late 2002, Oil and Natural Gas Corporation Videsh Limited (OVL), the international branch of India’s energy acquisition company ONGC, has been purchasing petroleum excavation and related infrastructure development project bids in Sudan from other multinational companies. These companies—most notably Canada’s Talisman, Sweden’s Lundin, and Austria’s OMV—had been pulling out of Sudan due to the deteriorating security situation around their concessions, as well as human rights concerns expressed by both shareholders and citizens in their countries. OVL took over nearly a quarter of the Greater Nile Petroleum Operating Company (GNPOC) conglomerate, and a number of additional petroleum reserve blocks of its own, including blocks 2, 5A, and 5B. Beyond mere oil concessions, India undertook a contract to build a 1.2 billion USD oil refinery, and a 200 million USD multi-product export pipeline from Khartoum refinery to Port Sudan on the Red Sea. Bharat Heavy Electricals Ltd. (BHEL) signed a contract with the government of Sudan in September 2005 to build, among other infrastructure, a power generation plant in the central Sudanese White Nile state.

The link between human rights violations and India’s economic investments in Sudan is less direct. But India’s investments have inarguably added to Khartoum’s military coffers. When questioned about Indian investment vis-à-vis the human rights situation in Sudan in 2002, then-Minister of Petroleum and Natural Gas of India Ram Naik said, “I know in the U.S.A. or Canada these feelings are there. But we in India don’t have such feelings on this issue. We feel the investments there are safe and, since it’s a producing field, we are keen to have it. My greatest interest is to have equity oil as soon as possible.” Indeed, the position was in line with two traditional tenets of India’s realist-oriented foreign policy: non-intervention in the internal affairs of countries outside of South Asia, and a view that strategic and economic interests alone ought to determine New Delhi’s foreign policy actions.

From 2005, rights activists in the UK and US set divestment from Sudan as a tactical goal, citing the correlation between oil revenues and violence. The case of Indian divestment, however, was double-edged. Indian disinvestment from Sudan may well have made a punitive statement by linking Khartoum’s actions with retracted Indian funds. But it also would have restricted Indian access to Sudanese energy resources, while the relinquished contracts would likely have been given—on preferential financial terms—to firms from places like China, which actively supported Khartoum’s actions, and whose investment may have worsened the human security situation in Sudan. Indeed, China’s ability to fill any void was India’s particular concern—as it has been in places like Iran and Myanmar.

Yet India’s “national interest”, which includes securing access to stable sources of energy, is not incompatible with interventions that would ensure a peaceful, stable Sudan; in fact, quite the contrary. Ensuring the stability of a foreign investment changes the nature of a “strategic interest” that would influence foreign policy decisions. And even investments in another country’s economy are interventions in the internal affairs of that country.

Years and two Ministers of Petroleum and Natural Gas after Ram Naik’s pronouncement, OVL realised that the political situation in Sudan had become precarious enough to merit a little concern for the security of its own investments, if not Sudan itself, and took out political risk insurance for its second phase of investment in Sudan. And particularly as Indian projects traversed Sudan’s geography—from Jonglei province in the south, to the central Kordofan and Upper Nile provinces, through the pipeline in Sudan’s northeast—international war (between Sudan and Chad, Ethiopia, or Uganda) or internal conflict and genocide (in Darfur, southern Sudan, and the Nuba and Beja Mountains in the East) could implicate India’s own assets.

While the conflict in Darfur abated in 2009-10, the “Comprehensive Peace Agreement” of 2005 was to set the parameters for a final settlement between Khartoum and Juba, the capital of South Sudan. From that process, a June 2011 referendum resulted in the secession of South Sudan and its establishment as an independent country. Yet questions of which parts of which provinces—including oil fields—would go to which country remained unresolved. Hoping to seize some of the petroleum fields of regions under Juba’s jurisdiction, in late 2011 Khartoum began redeploying aircraft and militias against its own Nuba Mountains and South Sudan, which in turn reciprocated and cut off oil supplies, reigniting conflict in the region.

In April of 2012, India saw that conflict between Sudan and South Sudan was affecting the stability of its own investments, and publicly sent a special envoy to mediate between Khartoum and Juba. The decision to intervene diplomatically was made after Beijing announced its own decision to arbitrate between the two sides.

While emanating from ‘self’ interest, the move signifies a major development in India’s extra-regional engagement, demonstrating a union of its strategic interests and its ‘soft’ power. For decades, India tried to project its mere existence as a democracy as a source of influence. To those more interested in their own bottom line than in inspirational stories, this meant very little. Yet as countries like South Sudan emerge from instability, come into their own as nations, and endeavor to build up democratic governance, lessons from India’s domestic experiences, intertwined with its strategic interest, can be of great assistance.

In fact, India’s soft power edge may give it a strategic advantage. The US and Europe often have limited credibility in Africa and the Middle East due to their imperial legacies, while China, despite its hands-off reputation, effectively sides with status quo interests. For this reason, the South Sudanese have a relatively poor view of Beijing, which has long supported their oppressors in Khartoum. Chinese development projects import Chinese labor, while Indian investments employ locals. The presence of integrated Indian Diasporas in East Africa and the influence they bring, meanwhile, has facilitated New Delhi’s ensuing economic engagement. As South Sudan endeavors to integrate with the countries of East Africa—including with an oil pipeline to Kenya’s Lamu port to reduce its dependence on Port Sudan and Khartoum—India’s touch may be helpful.

As India’s own stake in the stability of places like Africa grows, exercising its particular influence for mutually beneficial aims will increasingly be in the interest of both New Delhi and African countries themselves.

Neil Padukone is a Fellow for Geopolitics at the Takshashila Institution. He was a co-founder of Banaa.org, a nonprofit that matches Sudanese refugees with undergraduate scholarships, and from 2007-2008, he served as an adviser to the UK House of Lords on Sudan. The views expressed are his own.

The Christian Science Monitor recently asked me for an op-ed on US-Pakistan relations.

“America’s way out of dependence on Pakistan: Iran” argues that America’s very dependence on Pakistan is the key source of regional instability, amounting to US support for a Pakistani military-economic complex that churns out militants and is the world’s worst nuclear proliferator. To change the tide, it ought to enlist the support of an unlikely ally: Iran, whose eastern Chabahar Road can help wean the world off its dependence on Pakistan and reorient Afghanistan’s future.

The article’s available here or in full at http://www.csmonitor.com/layout/set/print/content/view/print/547580

The article is available at the Huffington Post’s website, here.

The article’s available here or in full at http://www.csmonitor.com/layout/set/print/content/view/print/529780

Natural Allies?

in Perspective by Neil Padukone — June 19, 2012 at 6:18 pm

In the late 1990s, the United States and India embarked on a partnership based largely on three strategic issues: markets, counter-terrorism, and balancing China. With the opening of India’s economy in 1991, the United States saw India’s billion-strong population as a massive market for its businesses. In the wake of 9/11, Washington came to see India’s travails against Islamist militants in Kashmir and Afghanistan through the lens of its War on Terror and increased counter-terrorism cooperation with New Delhi. And as India’s and China’s strategic spaces began to overlap, managing China’s rise became a common concern for both New Delhi and Washington. With that in mind, the United States and India reversed decades of enmity and, through the 2006 nuclear deal, embarked upon a symbolic commitment to what heads of state of both countries have called a “natural alliance.”

Yet with all the fanfare- particularly after U.S. President Barack Obama voiced his support for a permanent Indian seat on the UN Security Council in his 2010 Lok Sabha speech- bilateral ties have recently been marked by considerable drift: India has not fallen in line on the issue of Iran, Washington is only slowly coming around on Pakistani militancy, the countries’ UN voting records do not mesh, and trade disagreements abound. Questions have been raised over why U.S.-India relations have cooled, or whether they were over hyped in the first place.

The U.S. Department of Defense’s “strategic pivot” toward Asia is one way to shore up relations and realign the Indo-U.S. partnership. India’s geostrategic location at the centre of the Indian Ocean—along with its naval expansion toward the southern Indian Ocean and its Port Blair naval base at the Andaman Islands—enable New Delhi to manage China’s presence in the region. Indeed, India and America’s navies have been more coordinated than any other bureaucracy since 2000. But the implications of this shared Beijing-centric orientation will only come about in the medium-term.

One dimension of these ties, the sale of defence technologies, is another place where India has not yet delivered: the recent Medium Multi-Role Combat Aircraft (MMRCA) competition failed to award contracts to American companies. And in the middle of a global recession in which all countries are hunkering down, and domestic inflation and unemployment—not to mention concerns over doing business in India, such as retroactive taxation and tax avoidance measures—have grown, economic reforms that would further open India’s markets have slowed. U.S. Secretary of State Hillary Clinton’s recent visit to Kolkata was largely an effort to encourage India to increase the speed of its market liberalisation, particularly in the retail sector. This may be a prospect for the future, but is doubtful today given India’s economic slowdown and the attendant drop in employment.

Yet perhaps the main reason for this strategic drift is that America’s key concern in South Asia these days is Afghanistan. President Obama delivered on his campaign promise to refocus efforts on the war in that country, and from 2009, his administration’s “AfPak” strategy took a regional perspective that originally sought to bring India into the equation. The thinking behind this, as Amitai Etzioni writes, is that  “for Pakistanis, conflict (with India) poses an ominous existential challenge that drives their behaviour on all things,” including “their approach to the West and the war in Afghanistan… If the India-Pakistan confrontation could be settled, chances for progress on other fronts would be greatly enhanced.”

The implication was that Washington ought to hyphenate India and Pakistan, to see the two as part of the same regional tussle, and try to settle the Kashmir dispute in order to make progress in Afghanistan. This was something New Delhi vehemently opposed and in fact, it sought de-hyphenation from Pakistan – engagement with New Delhi and Islamabad on separate and unconnected tracks. So when the office of the late US Special Adviser on Pakistan and Afghanistan Richard Holbrooke sought to include India and Kashmir in its purview, New Delhi successfully lobbied against it. This effort served one of India’s aims, insofar as it keeps Kashmir out of America’s area of direct intervention. Yet it also takes India, its assets, and its clout out of the broader Afghan resolution.

Among these assets is the Indian-constructed Chabahar Road that connects Iran’s eastern Chabahar Port on the Gulf of Oman to western Afghanistan. The road ends Pakistan’s monopoly on seaborne trade to Afghanistan, which has long allowed Islamabad’s pernicious dominance of Kabul’s economic and political life. In light of America’s confrontation with Iran and efforts to sanction the latter’s energy sector, however, Washington opposes India’s use of Chabahar, particularly to import Iranian oil and natural gas. Indeed another goal of Secretary Clinton’s visit was to try to shore up India’s support for sanctions against Iran—to which end India is reducing its dependence on Iranian energy as it awaits an exemption on sanctions from the US State Department.

But when New Delhi recently used its Chabahar road to send 100,000 tons of wheat to Kabul, its full potential vis-à-vis Afghanistan became evident. And this food aid was on top of India’s additional commitments to Afghanistan: constructing the Zaranj-Delaram highway in western Afghanistan that connects Chabahar to the Afghan ring road, the development of the Ayni Air base in Tajikistan (originally designed to treat wounded Afghan soldiers), building Afghanistan’s parliament building, exploring the Hajigak iron mine, and even commitments to train the Afghan National Police and Army—all of which amount to pledges of over $1 billion since 2001.

Washington has been wary of encouraging India’s presence in Afghanistan citing Islamabad’s fear of encirclement. But, even without American attention, a refutation of Pakistan’s “India Threat” narrative is already underway. In order to remain focused on strategic horizons beyond South Asia, India is reorienting its defence apparatus away from Pakistan and towards China and the southern Indian Ocean; even the Ayni Base and Chabahar Road can be seen as elements of this strategic shift beyond the subcontinent. Together with Pakistan’s focus on the Durand Line and events within its own borders, political breathing space between Islamabad and New Delhi has opened up. India-Pakistan talks have already produced a number of important breakthroughs that portend better bilateral days to come: the granting of Most-Favoured Nation status, enhanced trade measures, as well as discussions on the specific parameters of a Kashmir peace based on economic integration.

Specifically regarding the Indo-Pak dynamic in Afghanistan, things are less zero-sum than they appear. Important as the Chabahar route is, the combination of road, sea, and even rail links still comes with massive transport costs for India-Afghanistan trade. As S Verma, chairman of Steel Authority of India and the head of a consortium of Indian industries engaged in Afghanistan’s Hajigak iron mine, put it, “over the longer term,” transporting Afghan minerals over Pakistani territory “will be a productive investment. Not just for us, but others in the region including Pakistan. There are license fees, logistics, and so forth.”

Meanwhile, Kaustav Chakrabarti of the Observer Research Foundation has suggested “deploying joint Indo-Pak nation building teams” in Afghanistan that include advisors, military trainers, bureaucrats, developments experts, medical crews and NGOs. These teams would “provide additional resources, bridge political polarities, foster cooperation between India and Pakistan and devise means to verify each other’s role, and ultimately, present a long-term mechanism,” guaranteed by India and Pakistan’s geographic proximity, “to ensure Afghanistan’s neutrality.” He cites as a precedent the collaboration between Indian and Pakistani armed forces in “UN peacekeeping missions in hot spots like Somalia.”

Full realisation of any Indo-Pak promise will require more space, and time, between the two countries. The interim period, meanwhile, may indeed take a cooling period between the United States and India, who are unlikely to become allies in the fullest sense due to differing tactical approaches. But the strategic fundamentals of the Indo-American rapport—balancing China, expanding trade, and stabilising South Asia—remain intact.

Neil Padukone is a Fellow for geopolitics at the Takshashila Institution

Some quotes from the interview were included in the article below, entitled “U.S. pressures India to alienate strategic partner Iran.”

U.S. pressures India to alienate strategic partner Iran

When Hillary Clinton visited the Indian capital last week, the prickly subject of Iran was top of her agenda for talks with Prime Minister Manmohan Singh.

But even as the American Secretary of State was bluntly asking India to get onside with Western sanctions against Iran and its nuclear program, another set of meetings with Indian officials was in progress just down the road. That one was full of Iranian government delegates and business people, here to sign new trade deals.

India is walking a precarious line these days, attempting to placate the U.S., with whom it has a rapidly growing trade and strategic relationship, while retaining close relations with Iran – a regional friend that’s a source of badly-needed fuel, and more.

Ms. Clinton’s main focus was India’s purchase of Iranian oil. India is currently the number-two buyer of Iranian crude, which makes up 12 per cent of the energy need of this fuel-hungry nation. When the U.S. and European Union sanctions aimed at ending Iran’s nuclear program started to squeeze the international banking system, making it hard for India to pay for Iranian oil, the two countries worked out a scheme that lets India pay nearly half its bill in rupees – which Iran then spends on Indian food and pharmaceutical imports.

“It’s a double win for New Delhi,” said Neil Padukone, a fellow with the Takshashila Institution, a think tank focused on Indian strategic issues.

Nevertheless India’s Deputy Oil Minister R. P. N. Singh told parliament on Tuesday that fuel imports from Iran will be reduced, to a total of 114 million barrels in the financial year ending next March, down from 128 million the previous year, saying bluntly that the country has to maintain its strategic relationship with the U.S.

It’s not clear that will be enough for the Americans, who sent another envoy here Tuesday to talk energy and Iran with senior officials. India wants a waiver to exempt it from sanctions; the U.S. has said it hasn’t cut back enough.

Anxious to feed an economy growing at about 6.5 per cent this year, and reliant on imports for 80 per cent of its energy needs, India insists it can’t afford to cut back much more than it already has. Its oil imports from Iran date back to the era of the Shah, and many major Indian refineries are outfitted specifically to process Iranian sweet, light crude; it is no small task to retrofit them.

That said, as the financial channels for trade are choked off, oil purchases from Iran will fall even further, predicted Gopalaswami Parthasarathy, a veteran diplomat and analyst of Indian foreign policy.

India’s main oil supplier is Saudi Arabia, and the Saudis have offered to bump up sales to India to cover a drop in supply from Iran – the Saudis would also like to see India cut Iran off further, as part of the Sunni-Shiite struggle for dominance underway in the Middle East, noted Anwar Alam, director of the Centre for West Asian Studies at Jamia Milia Islamia University in Delhi.

“India has a vital stake in the Persian Gulf,” he said. “It has six million workers there which constitute the largest remittances sent to India, and $120-billion in trade with [Gulf Cooperation Council] countries.”

Yet while oil is the most obvious tie between India and Iran at present, India has a number of other key strategic motives for maintaining this relationship.

The first is Afghanistan. India has a large and growing presence there: its public face an aid program (India is the largest individual donor to the Afghans), its private face a humming intelligence network aimed at checking the Pakistani influence and thwarting the export of Islamist fundamentalism.

When Pakistan denied India a land route to Afghanistan, India turned to Iran, and put money into the Chahbahar seaport in southeastern Iran and built a 900-kilometre road that leads from the Iranian port all the way to Kabul. This trade route to Afghanistan is now a serious rival to Karachi’s port. This, and a new railroad the Indians are building, will facilitate transport from the major iron ore mine for which India has contracted in Afghanistan: this economy also has a ravenous appetite for resources.

And India hopes to reach more than just Afghanistan through that port.

“More important than oil or gas is the whole question of Central Asia – that’s where Iran is important for India,” said Prof. Alam. “India wants to be export-led and would like to capture the Central Asian market – Turkey, Russia, China and Iran are all there already.”

Delhi is drawing on a lesson here that it learned from another case where its energy needs and foreign policy intermingled – in Burma. Initially, democratic India froze out the junta that took power in what became Myanmar. But then it saw China – which is today India’s most serious strategic rival – move in and secure access to gas fields and hydroelectric power at preferential rates, while India was shut out. Already, Chinese state-backed firms have secured more than $40-billion in contracts in Iran’s oil and gas industries, making up some of the capital gap caused by the sanctions.

“That was one case where India realized it’s not just a matter of disengaging and getting the results it wants,” said Mr. Padukone, of the Takshashila Institution. “India’s view is, ‘if we drop this country, China will pick up the pieces on preferential terms.’”

And finally there are domestic considerations: There is a sizable Shiite community in India’s 120 million Muslim minority, who look to Qom, Iran, as their spiritual centre. The government cannot afford to alienate them.

At the same time, India’s far-left parties, critical to the ruling coalition, make a show of decrying the U.S. attempts to meddle in foreign policy.

India has repeatedly voted against Iran at the International Atomic Energy Agency, and encouraged it to abide by the provisions of the non-proliferation treaty it signed. But Delhi endured its own years of sanctions and isolation over the nuclear issue; it doesn’t like the policy, and it doesn’t believe it works.

“In principle we resent sanctions that other people try to impose on us. We abide by sanctions that are internationally sanctified by the United Nations Security Council,” said Mr. Parthasarathy. “And beyond that it’s not for us to lecture others on this issue.”

Hillary Clinton visits India as New Delhi ‘faces dilemma’

Published: 08 May, 2012

Hillary Clinton is visiting India in the hope of persuading the country to halt oil imports from Iran or face sanctions itself. RT discussed the subject with Neil Padukone, an expert in geopolitics at the Takshashila Institution.

­RT: The US and other Western nations have been ramping up pressure on the Iranian nuclear program for a long time now. But why bring India into it?

Neil Padukone: For the last five or ten years or so, Indian companies have been increasing their presence in the Iranian energy sector. So much so that a number of Indian oil refineries are specifically designed to refine Iran’s particular blend of crude oil. As a result of this engagement, India has become, along with China, one of the largest investors in Iran’s energy sector and one of its largest importers of crude oil. So if there’s going to be any dent to Iran’s energy sector, it’s going to have to involve countries like India and China and others that invest heavily in it.

RT: What will it mean for India if the US does, in fact, hit New Delhi with sanctions?

NP: I’m not sure if New Delhi itself would be directly hit, though its energy companies could certainly be sanctioned. But the challenge for India is that it wouldn’t be all that easy to switch from Iranian crude to other sources, in part because the refineries in India are particularly geared to refine Iranian crude and it would take a difficult and extensive retrofitting process to be able to do that. But at the same time it’s not just a matter of energy dependence. Because Pakistan has not allowed India to access Afghanistan through its borders, and across its territory, India has been forced to look a little further abroad. So it developed a very strategic link between the Chabahar Port in eastern Iran on the Gulf of Oman and western Afghanistan. And this road not only takes away Pakistan’s monopoly on Afghanistan’s maritime trade, but it also gives India some very strategic important access to Afghanistan and to central Asia in general. So sanctions would be a little more complicated than just withdrawing from the energy sector.

RT: What is India’s stance on Tehran now?

NP: India has been facing a dilemma because it depends on Iran not only for energy and other trade, but also for strategic access to Central Asia and for other strategic ties. So on one hand it can’t entirely drop Iran, also for fear that if it does so, China would pick up the pieces, especially on preferential financial terms. But at the same time, it can’t entirely reject the United States’ position because India is, of course, America’s burgeoning strategic ally. They have tremendous amounts of trade, they share strategic interests elsewhere in the world. So for the last five years and continuing, India has been trying to balance and juggle its relations between Iran and the United States—even trying to convince the US to ease its confrontational approach with Iran.

RT: What is India’s alternative if it does stop buying oil from Iran?

NP: India is currently waiting for an exemption from US penalties on financial transactions with Iran. But, as it’s been doing over the last few years, India’s also been looking for creative means to engage with Iran economically. That involves creating new corporate entities that are outside of the realm of Western financial sanctions and even buying Iranian crude through rupees or with gold, so that Tehran will be forced to buy other Indian goods in return. So it’s sort of reverted to a barter system. So that’s one method of continuing to engage with Iran economically.

RT: India buys almost 80 per cent of Iranian crude, but has vowed to curtail its import of Iranian oil by 20 per cent, officials reported. For India, Iranian oil imports currently make up approximately 10 per cent of total oil imports, but that number is set to fall to seven per cent next year.