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In an oil slick: On Iran sanctions

Faced with the U.S.’s intransigent(refusing to change; बदलने से इनकार  करना ) demand that all countries put a full stop (end; अंत) to oil imports from Iran or face sanctions (punishment; सज़ा ), the Indian government has indicated it will ‘zero out’ oil imports after the May 2 deadline(last date; अंतिम तिथि). Statements from the Petroleum and External Affairs Ministries suggest the government’s focus is now on finding alternative sources of energy, and minimising (decreasing; कम करना ) the impact on the Indian market. At last count, India was importing about 10% of its oil needs from Iran, although it had considerably (significantly; काफी मात्रा में ) reduced its intake over the last few months. The U.S. has made it clear that Indian companies that continue to import oil from Iran would face severe (strict; सख्त) secondary sanctions, including being taken out of the SWIFT international banking system and a freeze on dollar transactions and U.S. assets. In response, Indian importers, including the oil PSUs, have decided that sourcing oil from Iran is unviable(not profitable; अलाभकर) at present. As a result, the government is seeking to explain the decision as a pragmatic (practical; व्यावहारिक) one, taken in India’s best interests. Officials point to the six-month reprieve (period of relief; राहत की अवधि), from November 2018 to May 2019, that they received from the U.S. in the form of sanctions waivers (an agreement that you do not have to pay or obey something; छूटपत्र (एक अनुबंध जिसे आपको कुछ भुगतान या भुगतान करने की आवश्यकता नहीं है) to import Iranian oil, and the exemption (free from obligation; दायित्व से मुक्त) to continue developing the Chabahar port, as positive outcomes of the negotiations (discussion; चर्चा)over the past year. Such arguments are, however, not very convincing. India has, in effect, now decided to cave in (to give in;स्वीकार करना ) to U.S. pressure on the issue less than a year after External Affairs Minister Sushma Swaraj said that India would recognise only UN sanctions, not “unilateral(taken by a country and not UN; एकपक्षीय) ones. In fact, last February Prime Minister Narendra Modi vowed (promised; वादा किया ) in Iranian President Hassan Rouhani’s presence in Delhi to increase India’s oil intake from Iran.

There are other real costs attached to the U.S. ultimatum (a final demand; एक अंतिम मांग) that India may have to bear. The price of oil has already shot up above the $70 mark in April. In addition, Iran has threatened to shut down the Strait of Hormuz, a key (important; महत्वपूर्ण) channel for global oil shipments, which would further lead to inflationary trends, not just for oil but other commodities too. Any direct backlash (a negative reaction;एक नकारात्मक प्रतिक्रिया) from Iran for its decision will also jeopardise (destabilise;अस्थिर करना ) India’s other interests in the country, including its considerable investment in the Chabahar port, which India is building as an alternative route for trade to Central Asia. In the larger picture, India isn’t just testing its traditional ties with Iran, but also giving in to President Donald Trump’s blatant (unreasonable;अनुचित) bullying after his administration withdrew from the Iran nuclear deal. Instead of engaging in what appear to have been fruitless negotiations with the U.S. over the past year, India, China, the EU and other affected entities could have spent their time more productively in building a counter with an alternative financial architecture, immune to the U.S.’s arbitrary (random;बिना सोचे समझे) moves.

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