Is India Sensing a Lifting of the Iranian Sanctions?

 By Vishakh Krishnan Valiathan
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In a span of a month, there has been a sense of commotion and confusion revolving around the Persian Gulf and the United States’ (US) policy towards Iran. Since the time sanctions were reemployed on Iran, only problems have triggered around the gulf with Trump’s decisions. The recent firing of John Bolton from office as the National Security Advisor [[i]], who was a hardliner of policies on Iran, might actually be a gateway for resolutions to many issues pertaining in the region. The firing of Bolton and scrapping of Taliban Peace Talks[[ii]] comes at a time when Trump is left void in the promises he made during the 2016 election campaign and  now he looks at Iran as a sole weapon for his way towards the 2020 elections[[iii]]. Now, as Trump has shown interest in talks with his Iranian counterpart, it would be interesting on how things shape up with also the recent attacks on Saudi’s Aramco.US has blamed Iran on the attacks but Saudi has not pointed out directly on the latter[[iv]]. However, keeping this incident apart, it is likely that the meet up between the US and Iran Presidents’ could take place in the sidelines of the United Nations General Assembly meeting at New York[[v]]; this to an extent seems to be a positive development for the world and especially for India.

In spite of having top diplomats, Trump has shifted majority of important positions multiple times, except that the delivery from them has not been satisfactory to the US president. Conflicting views and policies have been the case in the past and this has caused a lot of commotion in decision making from the White House in the recent past. However, Trump usually goes with his instincts and this also shows that when Afghanistan and North Korea did not work, then the next best option is only- Iran. There is also all possibility that he might turn the clock back to where President Obama had left with them.

Over the years President Trump has tried to showcase that he is a peacemaker or a broker to mediate resolution but has only failed to most of it. Let it be North Korea or Afghanistan, both did not produce any fruitful rewards under him lest that both nations have become more resistive in their approach. Meantime he showed interest in the Kashmir issue which India strongly condemned over it specifying that – it is a bilateral issue [[vi]]. Apart from this, Trump’s tweets have triggered to be controversial and making him the focal point in the media most of the time. However, Trump’s instincts can change his foreign policies in a matter of minutes.

Since May this year India has sacrificed a large chunk of oil import from Iran due to the US sanctions. India had to decrease its dependency from 2.5 billion tonnes of oil to 1 million tonnes[[vii]] by the start of the embargo. However, it is important to note that India imports more than eighty four percent of its oil imports via Strait of Hormuz[[viii]] and de-escalation of tensions between US and Iran would be a relief to its trade. But more importantly if US decides to lift the sanctions, then the Indian government would be back to purchasing 2.5 billion tonnes in no time. However, India abides by its national interest and it is still sceptical whether the embargo would be lifted soon. But as Trump changes his decisions in a flash, India would be observing very carefully on the developments.

Apart from this, India would be relieved to an extent on scrapping of the Afghan Talks but it is in India’s interest to engage more productively with Afghanistan. The Chabahar Port Project had already been exempted from sanctions but India’s unrushed involvement [[ix]] is a quandary to be solved. In February earlier this year, the International University of Chabahar along with the Chabahar Free Zone Organisation had signed a Memorandum of Understanding (MoU) with China as the representatives from Chinese Ministry of Industry and Information Technology were present to inaugurate the China-Iran Innovation centre at the Chabahar Trade Free Zone[[x]] and this questions the trust of the Iranians on the viability of FTZ. However, Iran seized the opportunity of non-sanctions on Chabahar to invite other nations to be involved in the FTZ[xi]. Iran must be thankful to India on this as US thought that Chabahar would be helpful for India and Afghanistan. Never the less,  India is yet disappointed on the investment in the Farzad B gas field which was first offered to India’s ONGC Videsh Limited(OVL) but perceptively the Persian state had discussed of replacing OVL with a local firm[[xii]]. Evidently, India is upset with the developments in the Chabahar Free Trade Zone(C-FTZ); this might also be the cause of not giving much importance towards the development of the port as of now. Indian government had recently reduced the yearly allocation for the development of Chabahar Port from 150 crores to 45 crores[[xiii]].

Despite all these issues, India‘s relations with Iran stands commendable as the former portrays the fact that it abides with its national interest always. However, India’s stand on oil sanctions was basically due to the bilateral relations with US and its investments. But on the same hand, the South Asian nation should have thought of Iran in the same terms but national interest rode over this. Moreover, Trump’s changing nature of comments from the time Iranian Foreign Minister was invited by French President Macron at Biarritz in the sidelines of G7[[xiv]] and then recently after firing John Bolton, he told the reporters “It could happen. It could happen. No problem with me”[[xv]]- referring to meeting his Iranian counterpart Rouhani, is noteworthy. Perhaps India would be willing to hear any surprise which adds positively to the country’s policies.

 

References

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[[ii]] Ello,G and Seligman,L. “Taliban Peace Talks Scrapped”. Foreign Policy. 9 September 2019. Retrieved on 13 September 2019: https://foreignpolicy.com/2019/09/09/taliban-peace-talks-scrapped/
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[[vi]] Valiathan,VK. “ India’s Invitation to G7 Summit- Observations and Expectations”. CLAWS Focus No. 2037. 28 August 2019: Retrieved on 13 September 2019: https://www.claws.in/2037/indias-invitation-to-g7-summit-observations-and-expectations-vishakh-krishnan-valiathan.html
[[vii]] PTI. “US deadline ends, India stops buying Iranian Oil”. The Economic Times. 24 May 2019. Retrieved on 13 September 2019: https://economictimes.indiatimes.com/industry/energy/oil-gas/us-deadline-ends-india-stops-purchasing-iranian-oil/articleshow/69475495.cms?from=mdr
[[viii]] Valiathan,VK. “ Escalating Tensions in the Strait of Hormuz- India’s Responses”. CLAWS Focus No. 2021. 16 July 2019. Retrieved on 13 September 2019: https://www.claws.in/2021/escalating-tensions-in-the-strait-of-hormuz-%EF%BF%BD-indias-responses-vishakh-krishnan-valiathan.html
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[[x]] “ Iran-China Innovation Centre in Chabahar”. Financial Tribune. 1 February 2019. Retrieved on 16 September 2019: https://financialtribune.com/articles/sci-tech/96501/china-iran-innovation-center-in-chabahar
[[xi]] “400 Companies from 15 Countries to join Chabahar FTZ”. FARS News Agency. 8 January 2019. Retrieved on 16 September 2019: https://en.farsnews.com/newstext.aspx?nn=13971018001156
[[xii]] “Iran awaiting India’s decision on Farzad B gas field”. Financial Tribune. 6 April 2019. Retrieved on 13 September 2019: https://financialtribune.com/articles/energy/97297/iran-awaiting-india-s-decision-on-farzad-b-gas-field
[[xiii]] Mohan,G. “Indian Committed to Chabahar Port Despite Budget slash from Rs 150 crore to Rs 45 crore:Diplomats”. India Today. 9 July 2019: https://www.indiatoday.in/india/story/india-committed-to-chabahar-port-1565578-2019-07-09
[[xiv]]Valiathan,VK. “ India’s Invitation to G7 Summit- Observations and Expectations”. CLAWS Focus No. 2037. 28 August 2019: Retrieved on 13 September 2019
[[xv]]” Trump says he could meet with Iranian President Rouhani”. Reuters. 10 September 2019. Retrieved on 13 September 2019: https://www.reuters.com/article/us-iran-usa-trump/trump-says-he-could-meet-with-iranian-president-rouhani-idUSKCN1VU25N