Caught in US-Iran crossfire, India to work around curbs
Indrani Bagchi | TNN |
Updated: May 10, 2018, 12:12 IST
NEW DELHI: As the Iran nuclear deal lies in tatters after US President Donald Trump walked out on it, India finds itself back on familiar territory of having to stay engaged with Tehran despite a coming rash of US sanctions.
Playing safe, the MEA said on Wednesday, “India has always maintained that the Iranian nuclear issue should be resolved peacefully through dialogue and diplomacy by respecting Iran’s right to peaceful uses of nuclear energy as also the international community’s strong interest in the exclusively peaceful nature of Iran’s nuclear programme. All parties should engage constructively to address and resolve issues that have arisen with respect to the Joint Comprehensive Plan of Action (JCPOA).”
India was one of the countries most relieved when the JCPOA was signed in 2015, with PM Narendra Modi describing it as a “triumph of diplomacy and sagacity”. During Iranian President Hassan Rouhani’s visit here earlier this year, a joint statement recorded India’s support, describing the deal as a “crucial contribution to the non-proliferation framework and international peace, stability and security”.
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India came under intense US pressure from 2011 regarding its exposure to Iran and the Persian nation slipped from being India’s top source for oil, replaced by Iraq and Saudi Arabia. In 2018, India promised to up its offtake of oil from Iran. This may be impacted.
During the first round of sanctions, India built an alternative system of engaging with Iran while keeping its nose clean with the US — like using UCO Bank for payments. Those same processes will kick in this time too, officials said.
US enforcement could be much weaker this time around. In 2011-12, there was unanimous enforcement of sanctions by the P5+1. This time, the Europeans don’t want to tear up the deal, which means India will have many other countries willing to work around US sanctions. France, the UK and Germany have declared they will stand by the deal as have China and Russia.
The 90-day and 180-day waiver period by the US means a number of countries will have time to wind down operations in Iran. For India, the trouble spot here will be Chahbahar port which is crucial for connectivity and geopolitical links with Afghanistan and central Asia. In the previous round of sanctions, India and Afghanistan managed to squeeze an exception from the US on Chahbahar. India is confident of a similar exception this time.
The trouble will be to get Indian private sector to invest in Iran. The rupee-rial agreement to aid investments that was agreed upon during Rouhani’s visit is yet to become reality.
There is some concern regarding the “secondary sanctions” that the US has in mind — but this was around even in the first round of Iran sanctions. This threatens entities doing business in Iran with sanctions. But a US official told journalists on Wednesday, “The leverage that we gained from the secondary sanctions is what we used throughout the world with engagement to get countries to partner with us to build the economic isolation of Iran. That’s what we want to do again. “
But India has other concerns. Iran has not used the last few years well to rebuild its economy in any meaningful way. Its economic condition is even more vulnerable today than it was earlier. In the last few years, Iran has spent more capital on the conflicts in Syria, Yemen and Iraq, with the result that inflation and unemployment are rife and erupted in mass protests earlier this year. The Rouhani government is likely to come under greater domestic pressure, but more alarmingly, it could create greater space for the hardliners in Iran.
For the time being, India is waiting to see how the entire process unfolds.
