U.S. Secretary of State Hillary Clinton arrived in India on Sunday, the same day when a trade delegation came from Iran, with which Washington wants New Delhi to reduce its commercial ties, especially in energy.

Though senior diplomats and other line Ministry officials have held extensive discussions in the run-up to the India-U.S. Strategic Dialogue, to be anchored by Ms. Clinton and External Affairs Minister S.M. Krishna, officials said the Secretary of State, on one of her last visits to the region, wanted to utilise her presence in China and Bangladesh to visit Delhi too.

Iran will be one of the subjects during discussions on regional issues, but the focus will be largely on bilateral relations and initiatives being planned for the June 13 Strategic Dialogue in Washington, said official sources, , with at least a dozen subjects on the table.

On the back of bilateral trade in goods and services crossing $100 billion last year, Washington is looking at breakthroughs in investment opportunities and financial deregulation. Talks are being held on the progress made in varied sectors: civil nuclear, defence, security and intelligence, non-proliferation, disarmament and related issues, higher education and joint projects in Africa.

Ms. Clinton reached Kolkata on Sunday and will leave for Delhi on Monday after meeting West Bengal Chief Minister Mamata Banerjee. She will call on Prime Minister Manmohan Singh and UPA chairperson Sonia Gandhi, but the business part of discussions will take place on Tuesday.

In the run-up to the Indian leg of her visit, agencies have reported an official of her delegation as saying Ms. Clinton will once again persuade Indian leaders to cut down their dependence on Iranian oil. The official noted the stepped up Indian purchases of oil from Saudi Arabia which, he believes, means lower procurement of Iranian oil.

From June, the U.S. will begin implementing sanctions imposed on countries that do not end their oil trade with Iran. Washington has exempted Japan and a dozen of its European allies from the sanctions, but has not taken any decision on China, India, Turkey and South Africa. U.S. Special Envoy for global energy issues Carlos Pasqat will visit India later this month to drive home the point and take note of the reasons India cites for maintaining its energy ties with Iran.

But, in an indication of India's multi-directional interests, a large Iranian business delegation arrived here to hold talks with their Indian counterparts on ways of beating U.S. and European restrictions on trade with Iran. Under a deal, India will pay for about half of its Iranian oil purchases in rupee. This could be utilised by Tehran to buy Indian goods. An Indian delegation visited Iran in March to showcase its products. But both sides realised that some level of two-way trade was necessary to sustain the arrangement; this led to the Federation of Indian Chambers of Commerce and Industry to invite their Iranian counterparts at a time when the manufacturing sector is experiencing a sluggish growth.

The preparation for the Iranian business delegation's visit had been under way, much before the State Department informed South Block of Ms. Clinton's plan to add India to her itinerary. Officially, it was said Ms. Clinton's “visit to ‘strategic' partner India once she was in the neighbourhood is reflective of the depth of the ties and the level of comfort that exist between India and the U.S.”

Against this backdrop, agencies quoted Ms. Clinton as saying: “I think it's like any relationship — there is progress in some areas that we are very heartened by, and there is more work to be done. But that's the commitment we make when we say to another country, we want to be your partner.”

India has been unable to substantially reduce its oil imports from Iran because, as a senior diplomat put it, “we have to buy oil from wherever we can get it.” But its disinterestedness ensured that an important outlet for Iranian gas, the Iran-Pakistan-India Pakistan pipeline, remained on the drawing board, while the Washington-backed Turkmenistan-Afghanistan-Pakistan-India pipeline is on a sure footing, with the four participants confident of signing a gas sales-purchase agreement soon. Furthermore, India has not proposed dates for talks on the Farzad gas field; in fact, it reluctantly met Iranian interlocutors last year after Tehran indicated that it was revising the equity-holding of Indian companies.

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