New Delhi (Sputnik): India's attempt to replace Iranian crude oil with that from other countries may prove successful economically, but it will have a major impact on the popularity of Prime Minister Narendra Modi, an analyst has warned.
Recent crude import data suggested that India's crude oil import from the US soared at an unprecedented level in June this year. Going by the data released by Reuters, Indian refiners imported 15 million barrels of US crude in Jan-July 2018 in comparison to eight million barrels in all of 2017. In the meantime, oil imports from Iran fell by 16% in June, mainly due to a major fall in orders from private refiners. Senior analyst Harsh Vardhan Tripathi says the trend does not augur well with the election prospects of the ruling party.
READ MORE: Iran Threatens to Shelve Special Privileges For India in Case of Oil Imports Cut
"On the economic front, Indian refiners will definitely manage to purchase the required crude oil from other markets. Sanctions will not have much impact on the economic front but it will have a much larger implication on domestic politics. If India decides to cut crude import from Iran, it will have a negative bearing on the public perception about the Narendra Modi-led government. The people will believe that the government compromised with the strategically important relationship with Iran and that too under US pressure. The opposition parties will definitely try to cash in on this and if they succeed, it will deliver a big blow to the Modi government that is bracing for the 2019 elections," Harsh Vardhan Tripathi, a senior fellow at the Dr. Shyama Prasad Mookerjee Research Foundation, a Delhi-based think-tank told Sputnik.
"The reduction in import of oil from Iran shows that PM Modi is a paper tiger who has crumbled and given in to the pressure of [the] US," Jaiveer Shergill, spokesperson of the main opposition Congress party said during a rally last week.
The Congress has questioned whether the BJP has a plan to protect the consumers from rising fuel prices due to the reduction of oil imports from Iran.
Another opposition party, the left-wing CPI(M) has also questioned the Modi government's foreign policy priorities.
"India had stated only sanctions by the UN would be acceptable not by individual countries. What is India's foreign policy under Modi about? Following US diktats, and betraying India's interests," Sitaram Yechury, chief of the Communist Party of India (CPIM), asked the government bluntly.
READ MORE: US Sanctions on Iran: India Weighs in on 'National Interest'
Meanwhile, former Vice President Hamid Ansari has opined that maintaining cordial relations with Iran is extremely important to India.
"We have to keep in mind two things. We get a good amount of energy supply from Iran. But Iran is not only an energy supplier. Iran is a big and important country for us. It is a country which is next to Pakistan and Afghanistan. So when we look at Iran we have to understand these things too," Ansari said.
The opposition Congress party has taken the opportunity to remind the public about the strong stance taken by the previous government led by Manmohan Singh when the US and the EU had jointly imposed sanctions on Iran in 2012. The party has claimed that the then government had not bowed down to the US pressure, but had instead made several bilateral arrangements with Tehran in defiance of the sanctions. Furthermore, Manmohan Singh went to Tehran to attend the NAM Summit, much to the annoyance of the West, the Congress party has claimed.
READ MORE: OPEC Not Happy at Following American Line to Cut Off Iran’s Oil Exports — Journo
Iran is the third largest supplier of crude oil to India and contributed approximately 10% of total crude import last year. Besides, Iran is critical for India's outreach to Central Asia and Afghanistan. Meanwhile, a day after Iran threatened to shelve special privileges currently offered to India in case of cut in crude oil imports due to US sanctions, the Iranian Embassy in New Delhi softened its tone and said that it will do its best to ensure security of oil supply by offering "flexible measures" to boost bilateral trade.
"Iran understands the difficulties of India in dealing with (an) unstable energy market and it has done and will do its best to ensure the security of oil supply to India," the statement issued by the Iranian embassy in New Delhi last week read.
The views and opinions expressed by Speakers in this article are those of the speakers and do not necessarily reflect the position of Sputnik.