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'Post Japan, will India turn to Iran for N-trade?'

By Aziz Haniffa
April 06, 2011 10:04 IST
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One of India's closest friends in the United States Congress, Representative Gary Ackerman, New York Democrat, on Tuesday asked Obama administration's point man for South Asia Robert Blake, as to what would happen if after the nuclear disaster in Japan, India may decide to forego the US-India civilian nuclear deal and rely more heavily on Iran for its energy requirements.

Ackerman, erstwhile chairman of the Congressional Caucus on India and Indian Americans, also pointedly asked Blake where the US-India deal stood also in the wake of recent concerns with the resurrection of the Bhopal tragedy in India, which had figured in the Parliament passing a tough nuclear liability law much to the chagrin of US business and industry and the Obama administration that has been looking toward grabbing a huge chunk of the Indian nuclear energy market.

The lawmaker told Blake, "India suffered a huge catastrophe in Bhopal, chemical spill. If you take a look at what's happening in Japan, it's actually frightening."

Ackerman noted, "We have helped in India with our 123 nuclear agreement to provide for nuclear energy. One of their thoughts in doing that was so that they are less reliant on the possibility of doing business with Iran and buying crude from Iran."

"If India decides to be as cautious as most countries are and slows down their nuclear and their civilian energy project, how likely is it that Iran will be higher on their radar for supplying the energy that they so voraciously need to consume?" he asked.

Blake in his response, said, "First of all, on the Japanese situation, I think it's really too early to say what effect Japan is going to have on India's nuclear program. I think India does remain very much committed to carrying out its nuclear program, because it has such huge energy needs that are going to be needed to support its growing economy and its growing population."

"So we continue to work very closely with our Indian friends to carry out the civil nuclear deal and I think they remain committed to it. We haven't received any indications of that."

However, Blake said, "In terms of India's continued reliance on Iran for oil and gas -- India presently imports about 15 percent of its oil from Iran. And I think that actually our sanctions and the international sanctions have had some impact, because Indian companies -- big companies like  Reliance -- increasingly are reading the tea leaves and understand that they have to make a choice. They have to make a strategic choice between trading with Iran and trading with the United States in the broader world. And increasingly, they are moving towards us and I think that is a very, very positive sign and it also puts pressure on the Iranians. So I actually think that the trends are good in this respect."

On another general question posed by lawmakers on corruption in the subcontinent, Blake brought up the recent furor in India over corruption, which rocked the Parliament in the wake of the revelations by WikiLeaks.

Congressman Gerry Connolly, Virginia Democrat, told Blake, "Some economists have argued in the past that corruption can be an economic efficiency in being able to sort of hot-wire around normal bureaucracy and get things done. But all of the stories one hears about the levels of corruption in this region, from Afghanistan to India, is that we have crossed a very different threshold. And we're talking about huge impediments, actually, to economic development and the ability for some kind of regular business code and protocol."

"How do we reconcile our foreign assistance and economic assistance programs in light of the obvious fact that massive corruption is occurring in some of these governments? What protections do we take for US tax dollars?" he asked.

Blake said he would like to "start on that with respect to India, because I think it's important. First of all, corruption is a huge issue right now in virtually every one of these states. In India, the corruption issue has brought Parliament to a standstill for the last six months, because they've been focused on particularly telecom's corruption. And I think it's also had an effect, a deterrent effect, on investment. And most Indians would say that as well. So there are real costs to the problem of corruption."

"But I also think that the government is committed to trying to deal with this. They have obviously a very open civil society, an independent judiciary, a very free Parliament, all of whom are looking to address this."

Blake also said, "The other thing that India has which is really important is a right-to-information law that they passed in 2005, where any Indian citizen can apply to find out how his or her tax money is being spent at any level of the government. And they have done so, so much so that, in fact, people that have exercised this right have been threatened because they've been effective in asserting their rights."

"So this is something where the United States has now started an open-government initiative with India to try to promote open government, not just in India but in other parts of the world. And I think it's another sign of how, again, India wants to take a greater responsibility in the world and wants to promote some of the values that we both cherish."

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Aziz Haniffa in Washington, DC
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