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Clinton to tell India: Cut back on Iran oil

Shannon Stapleton / AFP - Getty Images

U.S. Secretary of State Hillary Clinton waves upon her arrival at the airport in Kolkata, India on Sunday.

KOLKATA, India - The United States will seek assurances that India will reduce its purchases of oil from sanctions-hit Iran during a visit by Secretary of State Hillary Clinton to the South Asian giant this week, a senior U.S. official said on Sunday.

Clinton started a three-day trip to India on Sunday that will coincide with a visit by a large Iranian trade delegation, as India walks a tightrope of strengthening ties with ally the United States and sating its fast-growing energy needs.


She arrived in India from a 24-hour visit to Bangladesh, where NBC News reported that she visited the US Embassy in Dhaka to thank worker and expressed “hurt” at a local opinion poll that showed most people believe the U.S. is anti Muslim.

During her visit, Clinton will also make the case for the country to open its supermarket sector to foreign chains such as U.S. giant Wal-Mart Stores - a major economic reform that has stalled under Prime Minister Manmohan Singh's government.

India has publicly rejected Western sanctions but has pushed refiners to cut imports of oil from Iran by 15-20 percent - enough, it hopes, to win a waiver from Washington.

The United States in March granted exemptions to Japan and 10 European Union nations from its sanctions, which are aimed at pressuring Iran to end its nuclear programme. India and China, Iran's biggest buyers of crude, remain on a list at risk if they do not cut oil imports "substantially".

"Our assessment is India is making good progress but we really need to receive assurances that they are going to continue to make good progress," a senior U.S. official, travelling with Clinton, told reporters.

The 56-member trade delegation, led by the president of Iran's chamber of commerce, will also arrive on Sunday for another round of talks on how the two can trade via a rupee mechanism set up to skirt sanctions. A previous trade mission of Indian businesses to Iran in March had proved unproductive.

"These are not going to be strategic trades of any kind," the U.S. official said. "So I don't think that we are too concerned about this, but we'll obviously want to hear from the government what they see as the focus of this trade delegation."

Shannon Stapleton / AFP - Getty Images

U.S. Secretary of State Hillary Clinton speaks to students at the Dhaka International School in Dhaka, Sunday.

Relations between the United States and India have blossomed in recent years, especially during the presidency of George W. Bush, which signed a landmark civilian nuclear pact with India. But irritants, especially over trade and investment barriers, have raised temperatures of late.

Clinton arrives in India leaving behind her a stormy visit to China, which saw Beijing and Washington tussle over the fate of a blind Chinese human rights activist who had escaped 19 months of house arrest and fled to the U.S. embassy.

From Kolkata, Clinton will travel to New Delhi on Monday to meet Singh. Afghanistan and India's controversial proposals on retroactive taxation are likely talking points, Indian sources told Reuters last week.

Reuters contributed to this report.

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