As diplomatic dance continues between Iran and the US, the rest of the world is keen to work out the implications of such a realignment, if a rapprochement between Washington and Tehran does indeed become a reality. The US Congress has decided not to impose any new sanction on Iran, as Senate Democrats acceded to requests from president Obama to delay new legislation while world powers negotiate a nuclear deal with Tehran. Iranian foreign minister Javad Zarif had earlier underscored that any new sanction from Congress would collapse the nuclear talks between his country and the US, China, France, Germany, Russia and the UK. US secretary of state John Kerry had also warned Congress that any new sanction would unravel the international support that has made the pressure on Iran’s banking sector and oil industry so effective.
At the same time, the six Gulf Co-operation Council (GCC) member states have taken a major leap forward towards consolidation of regional security by agreeing on establishing the joint military command even as Washington has assured the GCC of continued co-operation, presence and support of the US forces in the region. The United States has decided to sell weapons to the GCC members as a block as opposed to individually, as has been the case in the past, and has encouraged the GCC members to better integrate the US missile defence systems with those of the GCC to enhance collective capabilities.
Much like many other states, India will not remain immune from the consequences of the trajectory of America’s policy towards the Middle East. For a long time now, New Delhi has been pursuing a careful balancing act between its relationships with Iran and the US. It’s expected that a potential US-Iran rapprochement will ease a lot of pressure on Indian diplomacy. While it will open up new possibilities for Indo-Iranian ties, it is unlikely to resolve all the problems. Just after Iran sealed an initial accord with six powers, including the US, to limit its nuclear programme in exchange for the easing of some sanctions, Indian foreign secretary Sujatha Singh met Iranian deputy foreign minister Ebrahim Rahimpour to discuss economic opportunities and plans are in place to speed up work on the Chabahar port in southeastern Iran. A trilateral pact between Iran, India and Afghanistan to develop Chabahar is ready to be signed.
Notwithstanding all the hype surrounding India’s ties with Iran, they remain largely under-developed even as the significant stakes that India has in the Arab Gulf often go unnoticed.The strategic reality that confronts New Delhi in the Middle East today is that India has far more significant interests to preserve in the Arab Gulf, and as tensions rise between the Sunni Arab regimes and Iran, India’s larger stakes there will continue to inhibit Indian–Iranian ties. At the same time, New Delhi’s outreach to Tehran will remain circumscribed by the internal power struggle within Iran, growing tensions between Iran and its Arab neighbours, and Iran’s continued defiance of the global nuclear order.
Even with a possible decline in Iran-US tensions, a number of issues will continue to complicate India-Iran relationship. This was exemplified when in September Iran released Indian tanker MT Desh Shanti along with its 32 seafarers that it had detained for 24 days at Bandar Abbas Port on the allegation of pollution. Iran detained the ship carrying crude oil from Iraq to India on August 13, saying it was polluting Iranian water, discharging wastes and water mixed with crude near the country’s Lavan island in the Persian Gulf. India had denied the allegation, underlining that the vessel was not in Iranian waters when it was detained. New Delhi took this very seriously and has filed an appeal with the Indian Ocean Memorandum of Understanding on Port State Control—a grouping of 16 maritime nations—calling for a review of Iran’s action.
India’s rapid growth has drastically heightened its need for energy resources and security, thus attaching urgent importance to relations with countries possessing and producing energy resources. It is largely in this context that India has moved closer to Iran, a nation heavily sanctioned by the US throughout the 2000s due to its lack of co-operation with international nuclear regulations and apparent sponsorship of terrorism and human rights violations. Wary of any international support of Iran, the US has pressured India to curb its relations with Tehran and significantly cut levels of Iranian oil imports.
Actions by the US and the EU have noticeably complicated transactions between Iran and importing nations, particularly India, which has been one of the largest recipients of Iranian oil exports. These complications were well illustrated by the EU sanctions banning European companies from insuring tankers that carry Iranian energy resources anywhere in the world. With nearly all tanker insurance based in Western nations, Indian shipping companies are reportedly left to turn to state insurance, which would only cover tankers for $50 million as opposed to the estimated $1 billion coverage typically offered by European agencies. Additionally, Western efforts to undermine financial institutions in Iran have complicated payments for Iranian oil exports. An executive order issued by the White House in November 2011 authorises the US secretary of state to impose financial sanctions upon any entity failing to satisfactorily curb support of the Iranian market according to American terms. To avoid sanctions, nations like India and China are speculated to be bartering food products, consumer goods and local currencies for oil, a system which may prove insufficient in meeting the payments necessary to maintain current levels of oil imports.
India’s relationship with Iran will face challenges, notwithstanding what happens on the US-Iran front, because the two have little to bind them together in the contemporary milieu. An Iran-West rapprochement might allow India to expand its economic and energy ties with Tehran and develop a more productive relationship on Afghanistan. But that is in the long-term. In the short-to-medium term, there are numerous challenges that both nations will have to navigate.
(The author is a reader in international relations, department of defence studies, King’s College, London. E-mail: harsh.pant@kcl.ac.uk)