India worked out sweetheart oil deal with Iraq in 1974: US cables

NEW DELHI: India had worked out a sweetheart oil deal with Iraq in 1974 until 1985 that saw New Delhi getting oil from the West Asian nation at $8.5 a barrel, bargaining the price down from $10. A US embassy cable reported “GoI (Iraq) offered to supply India through 1985, beginning at preferential price for first quarter of 1974 of $10 per barrel. Indians offered $8. Iraqis then came down to $8.5 which they claimed is the same price they charge the Russians.”

However,with Iran, India had a more strained relationship. Iranian PM Hoveyda told the US that he ‘felt sorry for the poor girl ( Indira Gandhi)’ because her problems are so enormous. He wondered out loud whether she was really in control of her government or whether she was a captive figurehead of her Cabinet.”

In fact, he reported Gandhi had given him the impression that she was not getting much out of the Indo-Soviet relationship and was looking for others, including the US.

India would pay, partly in cash, partly in goods while the rest would be treated as a long-term loan. Iraq in those days was in the Soviet sphere of influence, as was India. But despite this, India was strangely reluctant to sign a treaty with Baghdad, because Gandhi essentially distrusted Saddam Hussein, with her advisers calling his a “murderous” regime.

However,during her visit to Iraq, Indira’s hopes of getting the long-term loan were dashed because Hussein told her that India had to pay cash at market price.