The expiry of the sanctions-relief on Iran that had been given to India, China, Russia, European nations and various other partners of Iran has now been fully effected, bringing in its wake economic and political dilemma for these countries who were not just business partners of Iran, but, in some cases like India and China, even had deep historical, political and cultural linkages with the country.
That these ties need to be valued more than giving credence to temporary intimidating behaviour of the US is realized by both India and China. However, China has withstood the US sanctions more strongly than India, simply because China is already engaged in a trade war with the US and could pare down its Iranian oil imports without cutting them off completely. India, on the other hand, is in an unenviable position due to its budding “friendship” with the US and, therefore, not a single Indian company has placed an order for Iranian crude since May 2nd 2019.
This is no small crisis. India is being pinched hard economically by the US sanctions and is forced to risk its much more valuable historical and geopolitical relationship with Iran. Compared to what India is being forced to concede, the returns are not much.
The US is now engaged in a trade war with India as well, the US has no geopolitical or regional value here and operates through its allies and proxies, the US has failed to be attentive to India in its “Afghan peace talks”, the US is pressuring India to not buy S-400 missile defence system from Russia which is the most advanced of its kind in the world and is priced lower than the comparable US Patriot system, and the US has diplomatically pressurized India to sign military agreements that may or may not enable it to spy on our military communications networks. The US is also forcing India not to allow Chinese company Huawei into India’s 5G telecom trials – a blatant big brother-type of dictate. The US has also taken an extremely public and negative view of India’s data localization plans for American e-commerce firms, which prohibits them from storing Indian citizens’ data in the US.
This list can further go on, but suffice it to say that US seems to have forced India to concede a lot more and, in return, has given only verbal platitudes about how wonderful and strong the relationship is. The only silver lining is that while India may have conceded to the US in case of Iran and in signing the deals that US has been pressuring us since 2002, but has consistently maintained its positions in the ongoing US-India trade dispute and is also determined to buy S-400 from Russia. But the recalcitrance, grossly utilitarian and completely transactional approach of the US makes one wonder what is the exact ‘value’ of India-US relationship in the long-term and whether we can ever trust the western allies, as we have trusted our historical allies like Iran and Afghanistan.
Indeed, if there is an example in the present-day world of a country standing up steadily in the face of whimsical, humiliating and irresponsible US threats and pressure, it is Iran. It is not easy to be the biggest adversary of a country that has been regarded as the world’s superpower. But Iran has done it – and done it commendably – since 1980. Trump may harbor the delusion that the world starts and ends with the US and that his decree is law, but what he doesn’t realize is that Iran has battled hardships imposed by the West, not just recently but for the last 40 years.
It has withstood and is still battling immense economic pressures resulting in high unemployment and slow economic growth, since the West uses a combination of military and economic brutality to make other countries toe its line. Iran is also an example in the study of how to stand on a solid ground without engaging in global jihad, especially against the US and the West, as Sunni terrorists of other Muslim countries have done.
The way that Iran has conducted itself speaks volumes about the integrity, culture and long-term vision alive in the country’s blood, and that makes US and its Middle-east allies look like immature, opportunist bullies at best. The attitude is once again reflected in the present crisis facing the country. Evident also is the helplessness of the European countries to do anything to salvage their agreement with Iran, thereby rightly condemning them to a position of scorn and weakness in Iran’s eyes.
The Present Crisis
Iran is battling an extreme economic crisis and military vulnerability stemming out of the US sanctions re-imposed on it, after Donald Trump withdrew US unilaterally from the Joint Comprehensive Plan of Action (JCPOA) or the nuclear agreement signed by the US, France, Germany, UK, Russia and China with Iran in 2015. For years, Iran had been accused by the West of secretly developing its nuclear weapons programme. The country had denied, maintaining that they were enriching Uranium purely for civilian nuclear energy applications in various research fields, and often citing the 2003 public declaration by its Supreme Leader banning nuclear weapons and declaring them to be against Islam.
This stalemate ended in 2015 after Iran was granted partial sanctions relief in exchange of certain terms and conditions under the JCPOA. The majority of these terms ensured that officers from the International Atomic Energy Agency (IAEA) regularly visited Iranian nuclear facilities to ensure compliance, that the country destroyed its centrifuges, and that Iran will not enrich Uranium beyond 3.67% and in terms of quantity will limit its enriched stockpile to just 300 kg.
These were foolproof conditions, and by agreeing to them Iran was giving up a lot more than what it was gaining for just partial sanctions relief. Most countries usually enrich Uranium up to 5% level of purity for various civilian applications. The threshold of 3.67% is actually the minimum starting level needed for enriching uranium for application. Anything less than 20% enrichment purity is considered to be ‘low-enrichment’, but beyond 20% there is danger of converting into weapons-grade Uranium and from 20% level onwards, it begins to be regarded as potential proliferation material. For full-fledged weapons-grade Uranium, 90% enrichment purity is required. However, once a country crosses the 20% enrichment level, it’s a fairly quick process to reach the weapons-grade stage.
At the heart of the present face-off with the US are Iran’s gradual and calculated steps in breaching the 3.67% enrichment level and exceeding the 300 kg stockpile limit. Both these conditions have been breached by small levels in recent days, although Iran is always emphatic in its promise that the moment the sanctions are lifted, it will go back to the original conditions of the agreement.
However, there is no end in sight to the current conflict. While the US withdrew from JCPOA last year, the reason the Iranian regime was able to battle out the economic consequences was that US had given its allies, including India, a few months’ deadline to phase out Iranian imports and suspend business with Iran. Various financial mechanisms that countries like India and Europe tried to devise, to evade the sanctions, have not really taken off the ground, with the US adopting an absolutely fundamentalist posture on the issue.
That the window of past few months given to these countries to phase out oil imports from Iran could not be successfully utilized for coming up with a joint mechanism to evade US sanctions shows, both, the pervasive power of the US dollar and of the fact that countries took this lightly. India and Iran tried to come up with a currency-exchange mechanism and payment through local banks, but were unable to take it forward. The EU similarly came up with the much-hyped barter system called Instrument for Trade Exchanges (INSTEX) with Iran, but that was an utter failure since it did not include oil, Iran’s main commodity, and ended up looking more like a charity aid rather than a business instrument.
The economic problem in which the expiry of sanctions-relief puts countries like India is also not a small one. India is a net oil importer and used to import major part of its oil from Iran, with the Iranian trade conditions – such as free shipping and credit conditions – being much more attractive and with the older Indian refineries much more suited to processing Iranian crude efficiently.
However, since the last year, India has phased out of the Iranian oil import substantially and is importing more from US, Saudi Arabia, UAE and Iraq – countries which do not provide as attractive conditions as Iran. As a result of this change, India’s expenditure on oil imports in 2018-19 rose to $112 billion, up from $88 billion in 2017-18 (Dadwal & Balachandran, 2019). Oil imports have a precarious impact on out Current Account Deficit (CAD), with every $10 per barrel hike in crude oil widening India’s CAD by 0.4% (Dadwal & Balachandran, 2019).
Ever since US came into conflict with Venezuela few months back, India also had to stop oil imports from there, thereby squeezing it further. Unfortunately, even though India-Iran venture Chabahar Port is exempted from sanctions, yet business through it is at a standstill since none of the companies want to take a chance with angering the US and Iranian isolation has impacted the port as well. The marginalization of Chabahar was visible in the present Indian Budget outlay as well, which was decreased from 150 crore since the last time to just 45 crore this time.
From every possible angle, the situation is absurd. The world is being dictated by the whims of one country. But even through all of this, Iran has not bent to US pressure. In recent days, ever since the expiry of leeway provided to other countries and the escalation of US-Iran hostilities, US is probably finally getting convinced on the futility of blackmailing Iran. The US mistakenly assumed that bullying, trampling on Iran’s self-respect and international isolation and humiliation would make the regime bend. This did not happen.
The US has tried every possible tactic. It grandly stationed its military naval formations in the region. In a bizarre incident some days back, it dispatched its fighter aircraft to attack key Iranian military bases through covert airstrikes. The decision was rescinded just 10 minutes before the strikes and the fighter aircraft forced to turn back. These military escalations have further increased, since Iran has refused to take US and its allies’ threats lying down. Iran was also accused of having sabotaged a naval vessel belonging to Saudi Arabia during these days. Also, in an act of daring and brutal message to the West, Iran also likely sabotaged Japanese naval vessel near the Persian Gulf, on a day and at the exact time when Japanese PM was meeting Iranian leaders.
An embattled Iran increasingly finds itself in international cross-hairs. One of the worst blows came when UK, who had been paying lip service to upholding the JCPOA, backstabbed Iran. UK’s royal navy’s seizure of an Iranian vessel off the coast of Gibraltar was more of a self-goal, making it evident that the seizure had little legal basis and was done to please the US. Ostensibly, the reason given for seizing the Iranian vessel was that it was illegally transporting oil to Syria in contravention of EU sanctions imposed on the regime of Syria’s Assad.
The reasons given appear to be a weak excuse to mask UK’s real intentions to help the US, since Iran is neither a part of EU and therefore not bound by any EU sanctions and nor could the UK presumptively assume that the vessel was heading to Syria, without any definitive proof and in the face of denial by Iran. Even in terms of basic international law, it is obvious that UK is on a weak wicket here.
However, the way this conflict between Iran and the West is developing, nothing seems predictable. Iran had already warned of retaliation, which came recently, when the Iranian Revolutionary Guards seized a UK vessel, Steno Impero, which was passing near the Strait of Hormuz towards Saudi Arabia. While UK insists that the vessel was in international waters, where it was intercepted by Iran and forced to change its course, Iran denies this. India has found itself in a quandary in both cases. While there were several Indians onboard the Iranian vessel seized by UK, in case of the UK vessel seized by Iran, 18 out of 23 passengers were Indian. While India is negotiating with Iran for their release, immediate results are very unlikely.
Predictably, the US has announced its intention to station American troops in Saudi Arabia. This spiral is unlikely to end unless a permanent solution is found to the problem. Things have reached such a pass that a war with Iran is not being ruled out either.
Motivations Behind Containing Iran: West Asian Politics
While the French and the Japanese have rushed to contain the damage over the last few days, the US has also realized that it has miscalculated. That is why it is now ‘offering’ to Iran to come to the table for talks – a belated offer which Iran was right to have rejected. With the bulk of preconditions that US has set, it would be futile to negotiate a new nuclear deal with them. Iran cannot simply barter its national honour for the lifting up of economic sanctions.
Iran also realizes that the sole purpose of US in Iran is not nuclear deal, but regime change and, subsequently, to bring Iran under the thumb of the US. Ever since the fall of Shah Pahlavi’s pro-West regime in Iran during the 1979 Iranian Revolution, US and Iran have been enemies. The US embassy in Iran has remained closed ever since and the place has actually become a symbolic memento – full of posters, images etc. – to cultivate anti-American nationalism among the Iranians. Iran withstood the pressure and whims of the world’s most powerful country for decades; for in reality, Iran is a deeper cultural powerhouse, with ancient roots that it still honours, than the US, whose material success belongs to the era of modernity.
Under Trump, what used to be a diffused and covert war with Iran has been brought out in the open. What irks the US further about Iran is not just their decades-old enmity, but also the fact of Iran’s pervasive influence in West Asia, which will become unstoppable if Iran goes nuclear. While US and its allies – Saudi Arabia, Egypt and UAE – have been able to bully their way through regime changes in other countries like Iraq and Libya, and keep countries like Lebanon, Oman and other smaller states firmly in the leash, Iran has proven to be elusive.
Iran is not a West Asian power proper. It pervades Persia and is the gateway to Inner and South Asia. It is separated from West Asian states by the Persian Gulf, the Strait of Hormuz and Gulf of Oman, and through its prime position can control the oil shipping and trading routes of the world, majority of which pass through the strait. Therefore, a recalcitrant Iran can pose a lot of problems by blocking or disrupting these shipping lanes.
So far, US has lost face in the various proxy battles that it and its allies have waged against Iran. In the Syrian conflict, the elite Iranian Revolutionary Guards – whom the US recently declared a terrorist group, despite them being the official military of Iran – played a pivotal role in flushing out the Islamic State terrorists. Iran enjoyed an alliance with Syria, Russia and Turkey in the Syrian conflict. On the opposite side were US, Saudi Arabia, UAE and Egypt, who were also ostensibly fighting the Islamic State, but who were instrumental in weakening the fight by arming the Syrian rebels in order to topple Assad’s regime. That they were unsuccessful in this venture despite protracted efforts lasting almost 6 years, shows how expertly Iran can beat them.
Besides the Syrian conflict, where the continuing Assad regime dealt a blow to the calculations of the US-Saudi alliance, Iran also emerged successful in the proxy war waged in Yemen, where it had propped up the Houthi rebels against the pro-West Yemeni regime. The rural rebels remained undefeated by brutal attacks by Saudi-US-UAE alliance. The Yemen war has famously brought lot of ridicule upon the Saudi crown prince and shown the world how resilient Iran can be.
Similarly, in Lebanon and Iraq, Iran exercises pervasive influence through its militant groups like Hezbollah and also through pro-Iran persons who are sitting in important positions of political power in these countries. Despite their calculations and offensive, the Saudi-UAE alliance backed by the West realizes that it was unable to prevent Iran from either deeply infiltrating the political systems of smaller countries or successfully waging proxy military offensive in other countries, thereby defeating them successfully. Iran is also the precise reason why Israel and Saudi Arabia-UAE have come together and the entire struggle for Palestinian independence has fallen on its head, since Iran – who supports Palestinian militant outfit, Hamas – is also Israel’s worst enemy.
Yet, curiously enough neither Hamas nor Hezbollah – despite being militant outfits – can be called global terrorists in any sense of the word. They firmly operate with a limited agenda and geography, to fulfill certain objectives. Iran’s strongest and only strength against its numerous enemies is proxy warfare through various outfits, at which it has become an expert. Boxed into a corner by sanctions and international isolation, Iran will lose advantage in direct war with the West. On the other hand, terrorist groups tracing their origin to Sunni states, such as al-Qaeda and ISIS are global jihadists outside the control of the political masters who used to patronize them, thereby showing how inept Saudi Arabia and UAE can be when compared to Iran.
The US would do well to remember that majority of al-Qaeda terrorists who struck on 9/11 were of Saudi nationality and not Iranian. Its difficult to recall a single incident of Iranian terror offensive outside of West Asia. US and others accuse Iran of sponsoring terrorism in West Asia and argue that an Iranian nuclear programme will make it further invincible.
True. But a strong Iran bodes ill for the West and not for countries like India; for, Iran’s obstructionism is ensuring that the US is unable to exercise complete influence in an otherwise passive and kowtowing West Asia.
Iran and India: Why India Should Stand Up to the US
However, the ultimate US agenda and activities in West Asia might prove to be detrimental to India and the rest of the world. US’s meddlesome regime changes in the region and its security alliances based on mercantile desire for oil and business proved to be a catalyst in the rise of global jihad. The birth of Sunni terrorists like al-Qaeda and Taliban can directly be attributed to the US and its European allies. US was responsible for the fall of several liberal regimes in Muslim countries, including Afghanistan, only because they were perceived to be Leftist. This was done by presenting jihad and radical political Islam as an alternative.
India has had to pay dearly for these actions of the US. The rise of extreme jihad in Kashmir after the 1989 was because of the money and confidence Pakistan got from the US and by being a part of the war in Afghanistan. Today, once again US has rendered India impotent because of its stand on Iran. Prior to US’s escalated offensive against Iran, India had managed to cultivate a sound strategic triangle of India, Iran and Afghanistan, reaching up to Inner Asian republics like Tajikistan, Turkmenistan, Kyrgyzstan and Uzbekistan, and completely bypassing Pakistan.
The same Indo-Iranian Chabahar port whose funding in the present Indian budget is a paltry 45 crore rupees was the mainstay of India-Iran collaboration. However, after the US sanctions, India has had to cut oil imports from Iran and can see its vision for Central Asia disintegrating before its eyes. With the US vigorously engaging the Taliban to effect its withdrawal from Afghanistan, India has been dealt yet another blow. The process means in any post-US polity, Taliban will have a substantial say in matters. What role Pakistan would play is still not clear, since Pakistan has been engaged by the US in Afghan peace talks due to its closeness to Taliban.
What is, however, clear is that Pakistan is already fishing in troubled waters. It is attempting to cultivate closer ties with both Iran and Afghanistan, trying to replace the partial vacuum created by India’s shift towards the US. The recent visit of Imran Khan to Iran and of Afghans to Pakistan show that things may be moving in this direction. In all of this, India – which has been excluded from the Afghan peace talks – has ended up looking like a side ally of the US, resembling a regional Britain or Europe.
India also faces potential side-effects of these geopolitical incidents in Kashmir. Since last year, there have been reports of attempts by Muslim countries to jostle for a place in Kashmir, trying to make it a playground for competing interests of Iran, Saudi Arabia, Turkey and Pakistan.
Last year, India unfavourably viewed the radicalization of Kashmiri Shia Muslims by visiting Iranian clerics, who attempted to incite them to join the global jihadi cause. Prior to that, Iran’s Supreme Leader, for the first time, added Kashmir to the list of other causes that Iran supports, such as Palestine. But these incidents are still at a very lower level and are more of Iranian warning signals to India rather than something concrete. After all, Iran is an astute player and it is difficult to imagine that India could continue on a happy trip of its own, cultivating closer ties with US and Israel and even Saudi Arabia, without Iran at least sending a veiled warning to India to not forget its neutrality and cross all limits.
Shias constitute nearly 15% of Kashmiri population and India has taken their support for granted. The worst thing for India, at this stage, would be the start of proxy conflicts between Iran, Saudi Arabia-Pakistan and Turkey in Kashmir. Turkey is aggressively trying to establish its soft power among Kashmiri Muslims, predictably because Erdogan is trying to be the leader of the Muslim world – an outcome which Saudi Arabia is loath to accept.
Fortunately, these conflicts will keep Muslims divided and prevent any kind of geopolitical implications for Kashmir, due to the strength of the Indian security apparatus. However, even these low intensity changes are a cost that India needs to factor into the loss-making deal that the US-Iran hostilities have become for India in the region.
This shift of India towards the US is, indeed, decisive and may prove to be a big negative for India in international politics. It’s not clear what India hopes to achieve by diluting its traditional friendships in the region. It already has a painful trade war going on with the US. The Trump administration has withdrawn several trade privileges which used to benefit India, besides slapping tariffs and accusing India of being protectionist. Indeed, India has retaliated in kind in the trade war. But so far, in geopolitics the alliance with the US is proving costly to India and beneficial to the US.
The US is simply trying to use India in two ways. One, in the Indian Ocean politics, it is trying to subsume India into its Pacific alliances with countries like Japan and Australia in order to contain China. And two, in the Central Asian region, it is trying to cut off India’s ties with Iran. Having ensured that India is no longer importing oil from Iran and that Chabahar project has become a dysfunctional squib, the US now wants India to start taking verbal positions against Iran.
In both these objectives, US has a lot to gain. US is not a direct power in the Asian and Indian Ocean region. But India dominates both the regions and India has traditionally been neutral and a stabilizing force that others have looked up to. India has nothing to gain by allowing US to use it this way, since India neither seeks to contain China nor Iran, both of whom are its close allies. In addition, the relationship with the US is costing India its alliances – including with Russia – by inevitably bringing it under the shadow of the West, while historically India has always stood independent.
The US has done little besides attempting to dictate to India to maintain a distance with Russia, Iran and China. The US had the temerity to pressurize India to not let China’s Huawei participate in the upcoming 5G trials in the country, to rescind the S-400 deal with Russia, to cut-off completely from Iran and to swallow the unpleasant and unacceptable US’s overtures towards Taliban and Pakistan in Afghan talks. What is India getting in return? A couple of security and military agreements, which would bring it further under the US alliance and which are suspect in terms of benefits.
While India is trying its best to withstand US pressure without completely antagonizing an immaturely-disposed US administration, this delicate balancing act has resulted in a stalemate of sorts and has ended up by boxing India into a corner, subsumed into dealing with these endless regional irritants, rather than being expansive and wide, and progressing further.
In recent days, yet another proof that emerged of the unreliability of the US was when it declared the Baloch militants in Pakistan a terror group – an outcome that has pleased Pakistan. This will clip their activities further and provide Pakistan more leeway – and every bit of breathing space given to Pakistan is akin to further terrorism in Kashmir. That the Baloch decision came within two months of listing of Masood Azhar as a global terrorist is also no mere fluke. A favour to India was counter-balanced by a favour to Pakistan. Thus, US’s “friendship” is never for free – not just for India, but for anyone. US understands, respects and befriends only the language of power. Indeed, with “friends” like US, India has no need of adversaries.
It is indeed astounding that the US should even expect India to cut-off relations from Iran comprehensively. A country which struck a cold and long-drawn bargain in listing a nobody like Azhar and that too with so many caveats as to dilute it completely, now expects India to give up all of its cultural and historical alliances for so little.
At this stage, India can ill afford to dilute its critical relationships with Iran and Afghanistan. US withdrawal from Afghanistan through its selfish and self-centered ‘Afghan Peace Process’ may have direct consequences in funneling more Pakistan-backed terror in Kashmir. Recently, the al-Qaeda chief broadcast a message warning India on Kashmir and declaring that Kashmir will be the next target of global jihad.
If this were to happen, India cannot simply depend on some vague goodwill or potential business or formal defence relations with a far off US. It needs close geographical allies like Iran and Afghanistan to keep the terror nexus in check. It has also been proven repeatedly that US is cold and brutal and it cannot be trusted as a friend. It can occupy a position as a foremost ally, but such a transactional and calculative country will not be able to bear the responsibility and trust of friendship. India would do well to keep its relationship with the US well within clearly drawn limits.