FROM the current US policies, it is obvious that terms of trade are more important to the Trump administration than geostrategic considerations. We believed that the US has jilted Pakistan to strengthen bonhomie with newfound partner, India.

The economic portents belie our perception. Last year, President Donald Trump identified countries with which the US ran trade deficits. India was on number 10 with a $24 billion ‘ticket’. To reduce the deficit, the US imposed tariffs on steel and aluminum products from India.

The US spurned appeals for exemption even from Argentina and Australia. India hit back with retaliatory tariffs. The US asked Indians not to import oil from Iran (from Nov 4, 2018 onwards) or buy the Russian S-400 air defence system. Or, else face sanctions. No regard for Indian funds sunk in Indian-built Chabahar port in Iran.

Annoyed at India’s hesitation, the US cancelled the India-US meeting to sign mega agreements on July 6. India is exploring possible consequences of Trumpian wrath. India bought around 10 per cent of its crude oil from Iran in 2016-17. Year 2018 would witness about 18pc import (33 million tonnes of crude).

The crude oil price in India is about US$ 77 per barrel. During 2012 and 2015, when the US, along with Europe, had last imposed sanctions on Iran, India reduced its crude oil imports from Iran to six per cent.

A Turkish bank helped to pay Iran for the oil, besides rupee-riyal mechanism. From February 2013, about half the oil import bill was paid in rupees.

Maryum Malik

Faisalabad

Published in Dawn, July 19th, 2018