May 8 (Bloomberg) -- U.S. Secretary of State Hillary Clinton called on India to further pressure Iran over its nuclear program after officials said the South Asian nation will curtail its imports of Iranian oil by 20 percent.
“We are aware that refineries have cut their orders and the actual purchases have been reduced, so we’re encouraged by what India has done,” Clinton said in an interview with Bloomberg Radio in New Delhi. “We think they can do more,” she said, adding that U.S. officials will continue talks to explore how India can meet its energy needs while supporting international efforts to curb Iran’s disputed atomic research.
Asia’s third-biggest oil importer will cut purchases of crude from Iran to 14 million tons from 17.5 million tons in the 12 months ending March 31, according to two Indian diplomats and two refinery officials who asked not to be identified because they weren’t authorized to speak publicly. The officials said Iranian crude would account for 7 percent of India’s imports in fiscal 2013, down from 10 percent currently.
In meetings yesterday, Indian Prime Minister Manmohan Singh, National Security Adviser Shivshankar Menon and Clinton agreed that Iran must fulfill its United Nations obligations to abandon any possible military dimensions of its nuclear program, according to a State Department official present at the talks who spoke on condition of anonymity.
“The U.S. and India share the same goal, we both want to prevent Iran getting a nuclear weapon,” Clinton said in New Delhi today at a joint press conference with Indian Foreign Minister S.M. Krishna. “India is a strong partner in urging Iran to live up to its international obligations.”
Clinton also briefed Singh on efforts to stabilize Afghanistan after the withdrawal of NATO combat troops in 2014, and welcomed his support for development in Afghanistan, including plans to host a conference in June to attract private sector investment, according to the State Department official in the meeting.
Both Clinton and Krishna urged Pakistan today to eliminate safe havens for Taliban militants along the country’s border with Afghanistan from where they have attacked U.S. troops and cities including Kabul.
India says it is reducing its dependence on Iranian oil even as its energy needs grow. More than 16 percent of India’s oil, or 21.8 million tons, was sourced from Iran in fiscal year 2009, compared with 17.5 million tons or 10 percent of total imports this fiscal year, according to two Indian officials.
The top U.S. diplomat urged India to abide by U.S. sanctions that will penalize financial institutions doing business with Iran in nations that fail to “significantly reduce” purchases of Iranian oil before a June 28 deadline.
U.S. sanctions have been an irritant in relations with New Delhi, which was the second-biggest buyer of Iranian oil last year. India imports almost 80 percent of its crude and has growing demands for an economy forecast to expand 7.3 percent in the year through March 2013, making energy security a top government concern.
The U.S. believes that there is sufficient production from Saudi Arabia, Iraq and other Persian Gulf nations for Iran’s customers to find alternate suppliers, Clinton said. The U.S. has been helping India find other sources of crude, she said.
While India has abided by several rounds of UN sanctions on Iran, it has publicly criticized unilateral American sanctions as an infringement on its sovereignty. U.S. and Indian officials say that while Singh’s administration doesn’t want to isolate Iran, an important trading partner and a route for India into Afghanistan, the government in New Delhi is quietly cooperating with oil sanctions and seeking an exemption from the U.S. penalties on financial transactions with Iran.
“India has vital stakes in the Gulf region,” Krishna said today, standing alongside Clinton. “We have a strong interest in a negotiated settlement of issues relating to Iran’s nuclear program.” While Iran “remains an important source of oil for us,” he said, its share of imports is declining.
The U.S. law and a European Union oil embargo that takes effect July 1 are pillars of a campaign intended to squeeze Iran’s main source of revenue to force it to meet international demands over the country’s nuclear program. The U.S., Europe and Israel say the program is a cover for developing an atomic weapons capability. Iran says it’s for civilian energy and medical research.
Representatives of the five permanent members of the UN Security Council -- the U.S., Britain, France, China and Russia -- as well as Germany plan to meet with Iranian officials again in Baghdad on May 23 to negotiate a settlement.
In March, the U.S. issued renewable, 180-day exemptions from sanctions to 10 EU nations and Japan, crediting them with significantly reducing imports of Iranian crude.
Carlos Pascual, the U.S. special envoy in charge of negotiations with the 12 Iranian oil importing nations that haven’t yet been granted exemptions, will follow up on Clinton’s visit with a mission to New Delhi next week, the secretary of state said in today’s interview.
Clinton said yesterday it was too early to tell whether India would earn an exemption.
Financial sanctions imposed in the last year have made it difficult for Iran’s customers to find banks to settle payments for Iranian oil. A request from Iran’s Parsian Bank to open an office in Mumbai was rejected because of U.S. pressure, two people with knowledge of the matter said yesterday.
In a workaround to pay for Iranian oil without running afoul of sanctions, Indian officials are establishing a rupee account at state-run UCO Bank that Indian refiners can use to pay for as much as 45 percent of Iranian oil purchases -- and which Iran may then use to purchase Indian goods in rupees.
To contact the reporter on this story: Indira A.R. Lakshmanan in Washington at email@example.com