The western tensions ratcheting up over Iran because of Tehran’s suspected ambitions to develop nuclear weapons are delivering a whole new slate of diplomatic, economic and trade challenges for New Delhi.

These problems have been exacerbated by a Feb. 15 incident in which unknown persons attached a so-called “sticky bomb” to an Israeli embassy car. The bomb exploded, seriously injuring an Israeli diplomat’s wife and causing minor injuries to three others in the cars.

While the strike appears to have been the result of complex Arab-Middle East-West Asia politics involving Iran, Palestine, Israel, Saudi Arabia, with India just one of the many playgrounds of retribution, it means that India must balance its extensive energy relations with Iran and Saudi Arabia alongside its growing interest in sharing Israel’s defense, agriculture and counter- terrorism intelligence methods.

India’s position is delicate indeed, with some 200 million Muslims among its 1.3 billion people, many of whom regard Israel as a mortal enemy. After decades in which New Delhi refused diplomatic recognition to Israel, India has dramatically shifted position. Today Israel has become India’s second-biggest weapons supplier at a time when the Indian government is vastly increasing its defense arsenal.

At the same time, India remains one of Iran’s remaining customers for oil as the west continues to tighten its embargo screws.

New Delhi and Tel Aviv are now discussing the prospects of gas exports from Israel to India. The deepening Indo-Israel relations have the blessings of the United States, which would like as much as possible to wean India away from dependence on Middle Eastern natural resources or diplomacy.

Iran, of course remains a tricky nation to do business due to the threats of imposition of US and EU sanctions. To keep the US happy, New Delhi has reluctantly stayed away from the US$7.5 billion Iran-Pakistan-India (IPI) gas pipeline project despite its growing need for energy supplies to keep its economy moving, now growing at a 7.5 percent annual clip and expected to rise to 8.1 percent in 2013.

Even though finance minister Pranab Mukherjee recently said that India will keep intact its hydrocarbon relations with Iran – its second biggest supplier after Saudi Arabia -- matters are not so simple.

New Delhi has been facing major payment issues for oil imported from Iran, which supplies 12 percent of India’s oil needs. The situation is forcing Indian refiners to seek crude elsewhere. Earlier this month, Mangalore Refinery and Petrochemicals (MRPL), India's biggest importer of Iranian crude oil, bought its first cargo of oil from Libya as it seeks to diversify oil sources.

Last month, MRPL’s head said there are concerns about possible supply disruption due to international sanctions on Iran and the company is keeping all avenues open.

Meanwhile, Indian state-owned explorer ONGC has so far kept away from developing the Farsi gas field where it has been granted interests by Tehran, for fear of sanctions.

Crude imports by Reliance Industries Limited for its refineries’ in Gujarat have been substantially curtailed to avoid problems in fuel sales to America that have been on the rise. Reliance is seeking to keep Washington happy as it has invested nearly US$3.6 billion in US shale assets and does not want suffer any US political actions. RIL was warned of penalties by the Obama administration for its business ties with Iran.

Given such a scenario India will need to calibrate its relations in a way that suits its interests. The practical approach would be to nurture independent and parallel lines of communication with both Iran and Israel despite the troubled relations between the two nations.

Giving in to international pressures would mean shutting out Iranian oil, which increases dependence on Saudi Arabia, which in turn is at loggerheads with Tehran. While Riyadh has already indicated that it is more than happy to oblige, New Delhi’s price negotiating position will be impacted.

In a fiercely competitive market there is no reason to believe that Saudi Arabia won’t exploit any monopoly position in India’s energy import basket.

Managing security is another aspect that will need careful handling. Terror and rebel networks globally are known to quickly adopt new devices and mechanisms given the ease of communication, first hand training and information exchange. For example, connections have been found between the Maoist rebels in India and the now decimated LTTE in Sri Lanka.

The use of the sticky bomb on the Israeli vehicle also raises the issue of pinpointed assassination attempt of important persons. The small explosive device, which can fit into the attacker’s palm, can be planted instantly on a car or a person using a magnet or adhesive. It can be set off by remote control or even tossed at any target, with the bomb exploding on impact.

So far Indian security and intelligence agencies have had to deal with terror strikes that have been broadly of two genres – heavily armed jihadi terrorists storming a location to cause loss of life or difficult to detect crude devices or improvised explosive devices (IEDs) planted in crowded places to cause maximum human damage.

More sophisticated explosive material such as RDX has been used in the Mumbai blasts of 1993 and the troubled regions of the northeast. But, the incidence has gone down. RDX needs to be secretly smuggled into the country and requires expert handling making the entire logistics prone to detection by security agencies.

IED attacks in trains, temples and markets have caused heavy casualties across cities in India with New Delhi and Mumbai two prime targets, though strikes have been orchestrated in Varanasi, Hyderabad, Bangalore, Ahmedabad, Surat, Guwahati, among others.

The crude devices, such as bombs hidden inside pressure cookers, can be locally assembled and executed by those lowest in hierarchy of terror cells of outfits such as the Pakistan-based Laskar-e-Toiba. The exercise can also be easily outsourced to petty mercenaries.

The more daring jihadi suicide attacks include Mumbai 2008 and the attempt to storm India’s Parliament in 2001.

The advent of sticky bombs raises new challenges for security agencies already under pressure to get their act right. Indian diplomats, the oil and home ministry also have their task cut out. With its large Muslim population, and with more militant Muslims over the border in Pakistan, the growing security and energy relationships with Israel mean that balancing Israel and Iran will not be easy.

(Siddharth Srivastava is a New Delhi-based journalist. He can be reached at sidsri@yahoo.com)