US-India ties hit rough patch over Iran

Less than a year ago, US Secretary of State Hillary Clinton visited India and declared that 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 toward 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.
“You can’t expect every few months or years that there’s going to be another giant announcement. This is the slog — this is the long-term commitment,” said Diane Farrell, executive vice president of the US-India Business Council.
Trade between the two countries has soared over the past decade but also hit high-profile disputes. The nuclear deal, meant to symbolize 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 the ubiquitous mom-and-pop stores in the world’s second most populous nation.
But few issues have caused as much friction as Iran.
A new US law, seeking to pressure Iran to end a nuclear program 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 Clinton’s July 2011 speech in Chennai where she urged a greater global leadership role for India.
State Department number three Wendy Sherman, on a visit last week to New Delhi, said the United States will “never seek to undermine India’s energy security” but called for pressure on Iran “in whatever ways are appropriate for India.”
India and China, whose emerging economies are heavily reliant on energy imports, have both opposed US sanctions on Iran. But China, and to some extent India, are both reported to be quietly diversifying their oil sources.
The United States has already exempted European Union members and Japan from the sanctions after crediting their efforts to cut down imports.