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Pakistan terror, not Iran, was focus of Hillary's talks in India

Jyoti Malhotra  |  New Delhi 

In contrast to the media brouhaha over America’s supposed anguish on India’s determination to continue buying oil from Iran, External Affairs Minister SM Krishna and US Secretary of State Hillary Clinton are believed to have hardly spent any time over discussing India’s real or imagined snub to the Americans.

Instead, Clinton was much more enraged in private about Pakistan's double role in the war on terror than she admitted to in the press conference later. At one point in the conversation, highly placed sources said, she told Krishna : “If you keep a snake in your backyard, it will come back and bite you some time or other.”

Clinton, the sources said, was referring to the Pakistan establishment’s sheltering of the deadly Haqqani network in the South Waziristan region, which has been involved in deadly terror attacks against both US and Indian citizens in neighbouring Afghanistan, as well as to the Pakistan army's well-known argument that there were “good” terrorists and “bad” ones.

Clinton is believed to have said Pakistan must understand there could be no segmented approach to terror and unless it tackled the phenomenon with single-minded will, it would return to strike the state.

The US diplomat's use of the Pakistan-terror argument was in sharp contrast to the small amount of time, and even some mirth, she displayed on the Iran issue vis-a-vis India, pointing to Krishna that she would have to raise it publicly to satisfy the mounting appetite of the American media.

“The Iran issue was not a major issue at all. Both sides referred to it obliquely, but Clinton didn't even push it. In fact, she seemed much more keen to talk about possible deliverables that could be achieved when the two ministers meet again for the bilateral strategic dialogue in mid-June,” the sources said.

Asked what these deliverables could be, they said the Westinghouse company's ongoing talks with the Nuclear Power Corporation of India Ltd (NPCIL) seemed to be proceeding fairly well.

Considering the Indian nuclear energy market is expected to grow to $100 billion in the next decade, Westinghouse seemed to have come to terms with the strict terms and conditions of the Nuclear Liability Bill passed last year. It is widely expected Westinghouse would pass on the higher cost of power to consumers, hedging its own profits.

It was in the context of discussions of how India's neighbourhood—Pakistan, Afghanistan, Iran, the Maldives and Bangladesh—was shaping up that the evolving India story on Iran unfolded and Krishna took the opportunity to talk about India's approach to the purchase of oil from Iran, that it was steadily reducing its exposure to that country, but that the US should understand it could not do so overnight.

As he told the press conference later, Krishna pointed out India was largely dependent on imports of oil, 10 million tonnes annually, and given the growing demand, it was “natural to try and diversify” its sources of imports, such as from Saudi Arabia.

In fact, the Indian and US delegations are said to have together chuckled about how the media in both countries were looking at the same story (Iran) from similar positions, and the distance both had travelled.

Clinton reiterated her well-known position that India seemed to be doing much more behind the scenes on reducing its exposure to Iran oil than it admitted, the sources said, adding the US administration and the Congress had very divergent positions on the India-Iran oil issue, but could not go public with it.

If the US administration understood India’s desperate need to buy oil from Iran, and, in fact, even turned a blind eye when Iranian oil moved to Afghanistan, via Pakistan, the US Congress, in an election year, was intent on looking at this as a black-and-white issue. "We commend India for steps its refineries are taking to reduce imports from Iran," Clinton told journalists later.

Certainly, there was no threat of sanctions against India, the sources said, though India continued to be part of the watchlist like China and South Korea. Japan and the European Union had been taken off the list about a month earlier.

In fact, there was another aspect of the dialogue that was given even less importance than the Iran oil issue—the ‘totalisation tax’ Indian IT companies are owed by the US, amounting to $1 billion every year, a variation of the double taxation system.

Even the controversy over multi-brand in retail is said to have hardly figured in the talks.

As Senator for New York, where large numbers of her voters are people of Indian origin, Clinton is sensitive to the ‘totalisation tax’ argument—that the US should pay this money back to the country.

In reality, the Indian sources conceded, the US would never return the money because it wouldn’t be able to find any, especially because it believed it was still not out of the recession. But for form's sake, the tax found its way into the public sphere.

The Indian delegation also felt Clinton didn't sound like she was on a ‘farewell tour’ of the region, as she pushed the Indian side to buy more American defence equipment. Certainly, in an election year, the Indian sources said, the Clinton hardsell was apiece her criticism of Pakistan and appreciation of India's key role in the region.

She reiterated Hafiz Saeed was carrying a $10-million bounty on his head, that both India and the US had work to do in Afghanistan (“our consultations with India and Afghanistan are very substantive”), that both sides shared the same goal on Iran (“to prevent it from getting a nuclear weapon”). "Our strategic interests are indeed converging, and so must our efforts,” Clinton said at the press conference, succinctly summing up her trip to India.

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First Published: Wed, May 09 2012. 00:46 IST