Clinton waves a big stick at India over Iranian oil

DELHI: Hillary Clinton came to India on a charm offensive. As she swept west across the country, she praised India's development and dynamism and its commitment to democracy and improving women's rights.

She professed a love for its culture and extolled the verse of the Bengali poet Tagore to an enraptured Kolkata audience: "I discovered him when I was in college and have been a fan ever since."

All smiles, but the US Secretary of State came with a serious agenda too. Her first order of business was Iranian oil sanctions.

The US has been disappointed by India's failure to curb its dependence on Iranian oil, as the US seeks worldwide action to squeeze Iran into revealing fully its nuclear ambitions.

While India has reduced marginally the amount of oil it buys from Iran, it still gets about 9 per cent of its oil from Iran. It is even circumventing international banking sanctions by arranging for some sales to be made in rupees, to be spent on Indian goods, to avoid borrowing US dollars.

The US believes its effort to pressure Iran into proving that its nuclear program is for peaceful purposes only is being undermined by India's lack of co-operation. The US may even sanction India if it determines it has not made sufficient cuts in its oil imports by the end of next month.


"We believe, at this moment in time, the principal threat is a nuclear-armed Iran," Mrs Clinton said. "We need India to be part of the international effort."

Mrs Clinton also pushed the US desire for further Indian economic reforms, in particular, foreign direct investment in multi-brand retailing.

American chains such as Wal-Mart see an Indian middle-class of 300 million and growing as a massive opportunity, but Indian law does not allow their presence in the country. Also on the agenda were regional water-sharing agreements, and nuclear liability laws.

But while the Secretary of State worked the ''kill 'em with kindness'' routine with India, she was more blunt with its neighbour, Pakistan, saying the country had not done enough to capture terrorists, in particular the suspected Mumbai attacks mastermind Hafiz Saeed.

Mrs Clinton also alleged the man who inherited the leadership of al-Qaeda from the slain Osama bin Laden, Ayman al-Zawahiri, was living somewhere in the country, and said America would not be deterred from hunting down more terrorist leaders.

The comments infuriated Pakistan. The Foreign Minister, Hina Rabbani Khar, dismissed them as conjecture and said the government had no evidence Zawahiri was in the country.