India in a bind

Harsha Kakar
Trump walking out of the Iran nuclear deal, India’s growing proximity to the US including they seeking to designate India as a major strategic ally, India’s close relations with Israel and Saudi Arabia, both arch enemies of Iran, and immense investments in the Chabahar port, when assessed together appears to be a diplomatic nightmare. Added to this confusion is India seeking to maintain close ties with Russia, an ally of Iran, but under multiple sanctions from the US.
The Iran nuclear deal, also termed the Joint Comprehensive Plan of Action (JCPOA) was reached in Jul 2015 between Iran, five permanent members of the UN, Germany and the EU. The other nations which signed the deal have decided to support it, though the US proposes to re-impose sanctions. How effective would be the support of others in the face of US sanctions remains a mute question.
India has always claimed to be following an independent foreign policy, however maintained its limits of engagement within international norms, avoiding diplomatic squabbles. It continued to purchase limited quantities of oil from Iran, even during international sanctions, though delayed payments, which were cleared post the lifting of sanctions. India pushed back development of Chabahar till the US lifted sanctions, post the signing of the nuclear deal.
India announced only last month that based on incentives offered by Tehran, government owned refineries plan to double Iranian oil imports from next year. India is Iran’s second largest oil client after China. With rising oil prices post the US action, India is already financially impacted. Since the sanctions are US specific, China may not adhere to it and if India does, then relations with Iran may be affected.
India therefore appears to be in a bind and would need deft diplomatic handling to overcome its predicament and maintain its commitments. It was impacted by the US imposing CAATSA (Countering America’s Adversaries Through Sanctions Act) and is seeking a wavier to continue with its purchase of the S-400 air defence missile systems, helicopters and frigates from Russia, though for India these are a strategic necessity.
The US needs India for multiple reasons including countering growing Chinese belligerence in the South China Sea and financial assistance in development of infrastructure in Afghanistan. Therefore, it may agree for the waiver at present, which again is indicative of India requesting for what should be its right. However, Iran is a different kettle of fish altogether. The hatred between the two has only been growing over the years.
The US seeks a regime change in Iran, which could come about by imposing sanctions resulting in internal unrest. Simultaneously, Iran and Israel are locked in an increasing state of strikes and counter strikes. Saudi Arabia is backing the US as it views growing Iran influence as a threat to its own sovereignty and dominance in the region. The launching of Iran made and delivered missiles from Yemen into Saudi territory has only increased tensions.
Thus, US sanctions on Iran, likely to be imposed in the coming days would impact Indian investments in Chabahar.India cannot afford to abandon the Chabahar port investments as China would willingly jump in, forcing India to lose out on what is being visualized as a counter to Gwadar. Further, this port would be India’s gateway to Central Asia, through Afghanistan. With most other nations, which were signatory to the Iran nuclear deal, still backing it, new sanctions would not be pushed through the UN but would be solely of the US.
The nature of sanctions though yet to be announced, would impact banks dealing with companies involved in the oil and nuclear business with Iran. This is the only manner by which the Iranian economy could be hit leading to unrest. Indian decision of shifting oil procurement would impact Indo-Iran relations adversely. If it decides to continue as hither-to-fore, then its relations with the US may be impacted.
India has avoided passing any comments, either against Iran or on the US pulling out of the deal, closely monitoring US and Israel actions. Sanctions imposed by the US would be readily accepted by Israel and Saudi Arabia, impacting India and its relations. India presently has good relations with both camps, hence would need to tread carefully.
India presently procures armaments from both the US and Israel. US sanctions invariably target sale of military hardware and spares to nations which ignore US diktats. India as the US’s largest military hardware purchaser cannot afford to be impacted. While India may yet seek other options, the US would also lose. The same would be the case with Israel.
Hence, while both nations would seek Indian support in the imposition of sanctions, they would always leave a small window open for negotiations, as neither nation wishes to lose the benefit of the Indian market. It is this window which Indian diplomacy would need to exploit.
Diplomatically, India would maintain neutrality in UN discussions on US and Iranian actions. It would need to continue development of Chabahar port solely because of its economic and security implications. This may still be accepted in international security circles, mainly the US, as it enables development of Afghanistan and reduces their dependency on Karachi and Pak’s sudden closure of borders.
The major issue would be its oil procurements from Iran, which may come under US sanctions. In this case it may have to resort to plain talking with the US, as its own security and economic interests are affected. Since it would remain within international norms, as UN sanctions are nigh impossible, it should be able to push it through. Bowing to US pressure and reducing oil procurements would break the bonhomie and trust which exists between India and Iran, which it can ill-afford.
At some stage, India as a growing military and economic powerhouse, whom the world seeks to engage must indicate the strength of its own foreign policy, rather than being cowed down under pressure. It cannot keep switching its foreign policy goals based on the idiosyncrasies of the US and its maverick presidents. It must ensure protection of its investments alongside its foreign policy goals. While neutrality is an ideal policy, however the same comes under increasing pressure when opposing power houses challenge each other. It is managing them that indicates India’s diplomatic power and leverages.
(The author is Retired Major General in Indian Army)
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