American Jews Object to Khullar's Plan for Iran Export Promotion

“We are alarmed and dismayed by this apparent move to elevate commercial interests over vital security concerns,” wrote AJC (American Jewish Committee), a century old organisation with branches the world over President Robert Elman and Executive Director David Harris in a letter to Indian Ambassador to US Nirupama Rao on 11 February.

The full text of the letter to Ambassador Rao follows:

Dear Ambassador Rao:

As you are aware, AJC has been a long-time friend of India and an advocate of increasingly close cooperation between Washington and New Delhi.

In that spirit, we were deeply troubled by recent news reports of Indian efforts to intensify trade relations with Iran at the very moment that Washington and fellow democracies are applying new economic pressures in the banking and energy sectors to persuade Tehran to halt its pursuit of nuclear-weapons capability.

We were particularly struck by the announcement this week, by Commerce Secretary Rahul Khullar, that “a huge delegation” of Indian business representatives would soon travel to Iran to capitalize on opportunities created by European withdrawal from the Iranian market. This suggests that New Delhi is attempting to take advantage of sanctions adopted by like-minded nations for the explicit purpose of preventing nuclear proliferation by a dangerously aggressive regime -- and which could, in turn, trigger an escalating arms race -- in a highly volatile region.

In light of India’s history of support for International Atomic Energy Agency resolutions on Iranian transgressions, and repeated expressions of Indian Government concern about Iran's nuclear ambitions, we are alarmed and dismayed by this apparent move to elevate commercial interests over vital security concerns.

India has asserted that it will only abide by UN Security Council restrictions on trade with Iran, but not go beyond. Yet, as in the recent case of Syria, further measures are today impossible because of a threatened veto by one or two permanent members. We fear that India risks not only the erosion of the latest steps laudably adopted in Washington, Brussels and elsewhere, but also its standing as an admired partner in safeguarding regional and global security.

We thank you for conveying AJC’s concerns on this urgent matter to your Government, and look forward to the prospect of discussing it with you at your earliest convenience.

With the assurance of our profound esteem and best wishes, we remain,

Robert Elman, President

David Harris, Executive Director

Editor replies to AJC in open letter

New Delhi

14 Feb 2012

Dear Mr Elman and Mr Harris:

This is the context of your letter to the Indian Ambassador to the United States Ms Nirupama Rao in which you have lodged a protest on promotion of trade with Iran by the Indian government. May I point out the following for your kind consideration as an expert on world trade and WTO with 35 years standing in the field while heading a think tank:

1 India is not violating Security Council resolutions 1737 of 2006, 1803 of 2008 or 1929 of 2010. These cover sanctions relating to nuclear matters. Promotion of normal trade with Iran on energy and food is not the subject matter of the resolutions.

India is deficient in energy, supplies from neighbouring countries will help it feed the growing demand in its industry and agriculture. Similarly, India is now surplus in rice and wheat, it has introduced a free export policy in October, 2011 to allow access to stocks, specially the food deficit countries in its neighbourhood.

We are also running a huge trade deficit, part of it coming from the high import of security goods from US and France. The gap can be bridged when exports match imports, thus the export promotion to Iran is only to keep India afloat in the turbulent times of today.

2 Trade matters are covered by WTO law, the basic principles are described in GATT 1994. Article XI of GATT prohibits restrictions in the course of trade between countries. Thus the Indian Government cannot stop an exporter or importer from trading with Iran. Restrictions can be placed only on grounds of security but there is no law or ruling in India or at the UN which will enable the imposition of trade restrictions of a general nature.

3 In my view, the recent steps of the US government to clamp down on those who are trading with Iran are not compatible with WTO principles of free trade. The EU too is, unfortunately, following in the footsteps of USA and will stop imports of crude from Iran from 1 July to follow the sanctions regime initiated by the US. In today’s world of interdependence, US banks and the US dollar will figure in almost every trade transaction since payment leg is necessary to complete the purchase of goods or services. A freeze on Iran through the payment route means a nullification of the trade benefits to India on both the import and export fronts.

As a country with a history of only 20 years of growth, India cannot pay the cost of maintaining the US sanctions, specially when the results of the measure could mean further escalation of the Iran crisis and rise in the price of crude.

Please do use your good offices to impress upon the US government that nuclear proliferation cannot be controlled by isolating Iran. Today, most countries have access to the technology in some form or the other. The international forums designed to handle disputes, namely the UN and the WTO should be used to control proliferation. Disarmament is also another answer.

4 We condemn the dastardly attack on Israel diplomats in India. These actions only heat up the atmosphere and create unstability and disruption in the world. India and the world of Jews have much in common, both have risen in the face of severe discrimination and oppression. Violence, specially against innocents, cannot be justified or countenanced. We must, however, go into the reasons why such actions are taking place and how the measures are justified by large sections of the people. Obviously, reason and trust have given way to feelings of revenge and vindication.

I believe that the Jews in America must play a part in normalizing relations between communities. Thus your letter to the Indian Ambassador not to conduct trade in energy and food with Iran is not in the right direction, in my opinion.

Arun Goyal