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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (5392)	7/30/1999 10:57:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

US questions India over Iraq loan Friday, July 30, 1999 Published at 12:22 GMT 13:22 UK BBC reports. United States officials have asked India to explain a $25m loan to Iraq which will be used to buy 1,000 Indian buses. American and British diplomats said the deal, signed in Baghdad on Thursday by the Indian and Iraqi oil ministers, appeared to be in violation of United Nations trade sanctions against Iraq. But India has denied the charge. The BBC Delhi Correspondent says India maintains the deal struck in Iraq will not violate UN sanctions. Explanation sought "We're seeking confirmation or clarification from the government of India about what exactly it has agreed to," Deputy US Ambassador Peter Burleigh told reporters. "It would be very surprising if any government, certainly including the Indian Government, were to consciously and publicly violate the sanctions," he said. The agreement between Iraq's Oil Minister Amer Rashid and his Indian counterpart, V K Ramamurthy, also covered the sale of 200,000 tonnes of wheat to Iraq by India. In addition, the Indian minister discussed Indian involvement in the Iraqi oil industry. Oil for food But the focus of Western diplomats is on the controversial loan to cover the cost of 1000 Indian-made Tata buses. Under a UN "oil for food" programme, Iraq is permitted to sell $5.2bn of oil, in exchange for the purchase of food, medicines and other essential commodities. While India's sale of wheat to Iraq is covered by the programme, the loan offer violates UN sanctions in place since 1990. Mr Ramamurthy said he was aware of the UN stricture, but said his country would not allow a friend like Iraq to suffer. "We are not a very rich country, but we are a country with a big heart," he said. Precedent Britain's ambassador to the UN, Sir Jeremy Greenstock, said India would have to approach the UN sanctions committee for permission to go through with their deal. "We expect India to go to the sanctions committee. If it does not, the committee would have to take it up," he said. Observers said western countries would worry over the consequence of India's action, which could encourage other countries to break sanctions. "This could be a precedent that gets Russian companies starting on their oil work, Chinese companies starting on their oil work," Middle East analyst Kenneth Katzman told Reuters. Russia and China have proposed that all sanctions on Iraq be suspended, after a new system to monitor its disarmament is in place.