US exempts India from Iran Oil sanctions

India will enter the third round of its Strategic Dialogue with the United States this week with the shadow of Iran-related sanctions off its back. The Obama administration announced exempting India, South Korea, and five other countries from Iran oil sanctions. 
Word of the sanctions relief came even as Human Resources Development minister Kapil Sibal and his team is scheduled to begin a high education dialogue with Secretary of State Hillary Clinton and her team on Tuesday, followed by the formal strategic dialogue on Wednesday. The possibility of sanctions, although remote, hung over the engagements. 
Clinton herself announced the exemptions even as Indian cabinet ministers and high officials trooped into Washington. “Today I have made the 
determination that seven economies – India, Malaysia, Republic of Korea, South Africa, Sri Lanka, Turkey and Taiwan – have all significantly reduced their volume of crude oil purchases from Iran. They join the 11 countries for which I made this determination in March. As a result, I will report to the Congress that sanctions pursuant to Section 1245(d)(1) of the National Defense Authorization Act for Fiscal Year 2012 will not apply to their financial institutions for a potentially renewable period of 180 days,” she said in a statement. 
The Obama administration has apparently been persuaded by New Delhi’s efforts to scale down oil imports from Iran. Indian officials say Iran has been relegated as the third-largest supplier of crude oil, down to only about 10% of the total imports from over 12% previously. It is expected come further down to 7-8% in 2012-13. 
The seven new exemptions, including for India, follows a similar action in March when the US announced that 11 countries, including 10 European states and Japan, would be excepted from financial sanctions due to their crude imports cut from Iran. More pertinently, it removes the bogey of sanctions over US-India engagement and gives one less stick to the anti-India constituency in Washington to beat New Delhi with.

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