India not Caving to the U.S. on Iran [alphavn]
April 5, 2012 Leave a comment
Unlike Turkey and Japan, who have played ball just enough to still be able to buy Iranian oil but avoid U.S. sanctions, India is pretty much moving ahead unilaterally, and publicly, flouting the American’s desire to isolate Iran.
Clearing the way for oil refiners to pay Iran in Indian rupee, the Union Budget has exempted the payments made for crude oil purchased from the Persian Gulf nation, from any local tax.Iran had in January agreed to accept 45 percent of the value of its oil exports to India in Indian rupees but the scheme could not be implemented due to taxation issues.It was feared that the money paid to National Iranian Oil Co (NIOC) may be considered as income generated by Iranian firm in the country and liable to be taxed. The withholding tax was up to 40 percent, which neither NIOC nor the Indian refiners wanted to pay.
Turkey continues to play both sides in this moving billions of dollars for the Indians to Iran as an intermediary. For how long though, apparently is up to the U.S. State Department as Turkey has made it clear that once the pressure gets too high, they will cut India off.
Talks between the U.S. and India began on Monday with this issue front and center in the negotiations. Given the current climate after the BRICS Summit and this latest move to allow refiners the tax exemption its pretty obvious that India’s stance is quite resolute, a stance the Americans do not generally tolerate from their allies.