India walks tightrope as U.S. toughens Iran sanctions

NEW DELHI — A bomb attack Monday on an Israeli diplomat’s car in New Delhi underlines the tough balancing act that India has to perform as it attempts to manage its relations with the United States and Israel, and with Iran.

Despite Iran’s denial that it was involved, the incident complicates an equation that India has managed adroitly for years. As U.S. pressure mounts on Iran, the government in New Delhi finds itself in an increasingly uncomfortable position: Its dependence on Iranian oil and unwillingness to join U.S.-led sanctions against Iran put it at odds with Washington over a top U.S. national security priority.

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 Intelligence shows that Iran received foreign assistance to overcome key hurdles in acquiring technology that could lead to a nuclear weapon, according to the International Atomic Energy Agency.

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 The arrest of a former U.S. Marine in Iran is the latest in a string of volatile incidents between the two countries in the past few months.

Remaining neutral in one of the world’s most intense contests could become increasingly tough. At risk are not only the chances of building a united front to pressure Tehran to abandon its uranium-enrichment program, but also a burgeoning partnership between the world’s largest democracies.

“We can avoid a train wreck between the United States and India, but it’s going to take some degree of seriousness and some work,” said Richard Fontaine, a senior fellow at the Center for a New American Security in Washington.

Iran is India’s second-largest source of crude oil, and officials say it would be difficult and potentially expensive to shift suppliers. With India’s economic growth slowing and global oil prices rising, New Delhi is reluctant to absorb those costs.

Wary of interfering in other countries’ affairs, India is also reluctant to join a U.S.-led coalition against a Muslim country, something that would be politically unpopular here.

“We have accepted sanctions that are made by the United Nations,” Foreign Secretary Ranjan Mathai warned last month. “Other sanctions do not apply to us. We don’t accept that position.”

India has quietly begun to diversify away from Iranian oil in recent years, with Tehran’s share of imports declining to 11.3 percent of the total in 2010-11 from 16.4 percent two years previously. Mathai said at a forum in Washington this week that the proportion had since fallen further, to “just below 10 percent.”

Energy ties

If Monday’s bomb attack is conclusively traced back to Iran — especially if Iran is found to be working with a local Islamist militant group, violating India’s territorial integrity to attack a third country’s diplomats — the strains between New Delhi and Tehran could erupt into the open.

“There are powerful long-term reasons for India’s cultivation of Iran, and these remain compelling,” said Shashank Joshi of the Royal United Services Institute in London. “At the same time, this touches on a very raw nerve for the Indian security establishment — and there will be many now arguing that India should stop working so hard to shield Iran from international pressure.”

Nevertheless, many here say it would be unrealistic to suggest that India completely sever its energy ties with Iran. Indeed, an Indian delegation is due in Tehran this month to work out a way around the U.S.-led sanctions regime, which has made it difficult for India to pay for Iranian oil.