The US is hoping that India would not move forward with the Iran-Pakistan-India gas pipeline project as Washington has imposed more sanctions on Tehran citing links to terrorism and weapons proliferation.
"With regard to the Iran pipeline issue... We're hoping that India won't move forward on this," a senior official said at a briefing on Thursday ahead of US Treasury Secretary Henry Paulson Paulson's four-day trip to India starting on Sunday.
"We think at a time when the world should be imposing greater discipline on its interactions with (Iranian) companies and financial institutions and the Iranian government more broadly, that this is not the right path forward." David McCormick, treasury undersecretary for international affairs, said.
The project would do little to provide energy security for India, McCormick said suggesting that would be better achieved by proceeding with the India-US civil nuclear deal that has been stalled by opposition from Indian coalition government's leftist supporters.
Though Paulson's trip was not designed for any discussions on the nuclear deal, he would as a senior US official certainly stress its enormous importance to and enormous benefits that it would bring to the two countries, he said.
"More broadly this is not the right path forward. We have been very clear on that," McCormick said noting that Washington's chief negotiator on the nuclear deal, Under Secretary for Political Affairs Nicholas Burns "has said that very clearly."
However, the US had a "profound understanding" of India's energy needs and it was "one of the underlying pieces of logic" of the civil nuclear deal, he said. "But we don't see a pipeline with Iran providing India with any real energy security given the state of the Iranian regime."
"So we're hopeful that India will not move forward on that," McCormick said hours after Washington imposed more sanctions on Iran, including its Revolutionary Guards Corp, its elite Qods force and three of its state banks, including its largest, Bank Melli, Bank Mellat and Bank Saderat.
The new sanctions against Iran, which has been at odds with Washington over its nuclear programme, were the most stringent since the 1979 Islamic revolution there.
The Bush administration has also accused Tehran of destabilising Iraq, Afghanistan, Lebanon and the Palestinian territories calling it the "Central Bank" for terrorism.