Finance Minister Nirmala Sitharaman has said that India wants to comply with global sanctions, including US sanctions on Venezuela and Russia. It, however, has to maintain its own strength and strategic interests. Sitharaman's response to US pressure on trade sanctions against Venezuela and Russia is significant in form and content.
The US imposed tough sanctions on Venezuela's oil industry, sacring away some global customers in an attempt to unseat President Nicholas Maduro, Reuters reported. But Indian refiner Mukesh Ambani-owned Reliance Industries Ltd has been buying Venezuelan crude from Russian major Rosneft. The company is set to resume direct oil loadings in the South American nation after a four-month pause. Another Indian company Nayara Energy (formerly Essar Oil) is also continuing its trade ties with Venezuela by directly dealing with state oil giant PDVSA.
The fact that the finance minister and not External Affairs Minister S Jaishankar sought to respond to the US pressure is seen as significant. This could imply an attempt to soften a likely US backlash, especially because of the unpredictability of US President Donald Trump's response in matters that are known to be close to his heart. Venezuela is one such issue on which Trump is known to easily adopt a tough stand.
Washington has already expressed its displeasure at New Delhi's move to buy Russia-built S400 'Triumf' missile defense system through a $5.43-billion deal. Jaishankar has said he believed that the US will understand Indian compulsions to have an air defense system. The US government uses its Countering America's Adversaries Through Sanctions Act (CAATSA) to take action against countries it feels go against its diktat.
Sitharaman said the Indian government has expressed its view to the United States, according to the report. "In specific issues which are critical for India's strategic interests, we have explained to the United States that India is a strategic partner for the United States of America and you want a strategic partner to be strong and not weakened," she said. "We value the strong partnership with the USA, but we should equally be allowed to be a strong economy."
The Indian response has come at a time when the International Monetary Fund (IMF) has lowered its outlook for India's growth in 2019, citing weaker-than-expected domestic demand. Reports say that the US-China trade wars will cut 2019 global growth to its slowest pace since the 2008 financial crisis. The slipping growth is increasingly placing beyond the country's reach Prime Minister's Narendra Modi's promise of a $5-trillion economy. India had toed the US line over the Iran sanctions which has roiled New Delhi's traditionally good relations with Teheran.
India's own gross domestic product (GDP) grew at its weakest pace since 2013 between April and June, triggering demands of further stimulus. "Global headwinds ... are getting stronger by the day," Sitharaman said. Asked about further fiscal stimulus, she said: "I have not closed the door" on that. New Delhi has been trying to boost domestic growth through an infrastructure package and a new loan program organized with the banking sector that has doled out loans worth over Rs 80,000 crore.
