Economy, Business And Markets

India Dragged Into US debate on Iran

India Dragged Into US debate on Iran India Dragged Into US debate on Iran

India has emerged as a silent, and unwilling, player in the count of supporters, and opponents, of President Barack Obama’s Iran deal currently unfolding in US Congress.

Lawmakers want to know what India, and other major importers of Iranian crude such as China and Japan, would do with money owed to Tehran in unpaid bills if the deal fell.

India owes Iran about $8.8 billion for crude purchases since 2012, which it was not able to pay because of US sanctions, according to Hindustan Times.

The nuclear deal signed by P5+1 with Iran in July unfreezes these assets totaling between an estimated $100 billion and $150 billion the world over.

“That money is held primarily in India, China, South Korea, Japan. So I’m on the phone to those countries, those embassies, those ambassadors, asking them the question, ‘What will you do if the United States walks away? Will Iran get this money anyway?’,” said Democratic senator Claire McCaskill in a TV interview recently.

Saying the issue was too sensitive for India to wade into, Indian diplomats refused to either confirm or deny these discussions or specify the number of such calls and requests received by the embassy.

“All I will say is that we have welcomed the deal,” said an official, reiterating the official Indian position. But media reports suggest India is preparing to start the payments.

Indian buyers of Iranian crude—refineries—have typically paid 45% of the bill into an account Tehran has with UCO bank, and withheld the rest.

Indian Commerce Minister Nirmala Sitharaman told Lok Sabha in March that Iran had $2.86 billion in the UCO bank account and was owed $5.94 billion by refineries as of February end.

Critics of the deal in the US argue Iran will use this money—which they are calling a “windfall”—to expand its influence in the region by fomenting unrest, funding terrorism.

Supporters, on the other hand, say that this money will go to Iran even if the deal falls because the US cannot persuade these countries to enforce its sanctions in perpetuity.

US Congress has until September 18—60 days after being officially notified of the deal—to approve or disapprove it. A kill-vote needs two-thirds support to override presidential veto.

Republicans, who control both chambers of congress, have vowed to vote against the deal en bloc, making it incumbent upon Democrats to stay together.

But some Democrats, including their next senate boss Chuck Schumer, have declared themselves against the deal, but, experts believe, their numbers are not large enough to imperil the deal.