Paradoxes of a Indo – Iran Relations – Alok Bansal and Kamal Kapoor

As India’s relations with US are moving on the fast track and the two largest democracies which were in the opposite camps during the Cold War come together, Iran remains the major stumbling block on the smooth progress of Indo-US relations.  One of the most challenging tasks for the Indian policy makers today, is to balance their continuing interaction with Iran and growing convergence with the US.  As Iran inches its way towards acquiring nuclear weapons, there is constant pressure from visiting American diplomats on India to reduce its trade with Iran.  On the other hand many in New Delhi claim that India and Iran share centuries old civilizational links.  However, India has also had similar links with China, and Pakistan was once its part, sharing a common history, culture and language, but none of these linkages ever stopped China or Pakistan from going to war with India.  Moreover Iran provided material assistance to Pakistan in its wars with India both in 1965 and 1971.  So the real compulsions that prevent India from snapping its links with Iran must be different.

It is not that India supports Iran’s quest for nuclear weapons and has categorically asked Iran to fulfill its obligations under the Nuclear Non-proliferation Treaty (NPT).  However, as the US is dependent on Pakistan for its access to Afghanistan and Central Asia, so is India on Iran for access to Afghanistan and Central Asia.  The US cannot visualise accessing Afghanistan and Central Asia through Iran, similarly, India this juncture cannot access this region through either Pakistan or China. Iran’s geostrategic location, which links West Asia, Caucasus, Central Asia and South Asia with one another, also provides India the shortest access to the energy resources of the Caspian Basin and the Caucasus. In the past, the US strategic interests in Pakistan forced it to look the other way as AQ Khan and his network smuggled in nuclear technology using dubious means.  It not only condoned proliferation to Pakistan, but also from Pakistan, going to the extent of  sacrificing a US counter proliferation official, Richard Barlow, to cover up Pakistan’s misdemeanour.  Similarly, India, despite realizing that Iran’s nuclear weapons pose a grave threat to regional security, is constrained by its national interests to ignore Iran’s violations of NPT.

As one of the fastest growing economies, with few indigenous energy resources, India is overwhelmingly dependent on imported hydrocarbons for the sustenance of its growth.  Iran with 10 percent of known oil reserves and 15 percent of global natural gas is an important player in the global energy market and its proximity to Indian refineries further enhance its significance to India.  Currently it accounts for 13 per cent of Indian crude imports and is the second largest source for Indian imports after Saudi Arabia.  With the reduction of Chinese crude imports from Iran, India has emerged as the largest destination for Iranian oil.  However despite large crude reserves, Iran lacks adequate refining capacity and imports a significant part of petroleum products that it consumes.  Many Indian refineries are not only dependent on the import of Iranian crude, but also on the export of petroleum products to Iran.  As the US has imposed sanctions on institutions dealing with Iran’s central bank, use of normal banking channels for Iranian trade has become impossible. Barter could have been an option, but as on date the balance of trade is heavily tilted in favour of Iran, which is still scouting for goods that it can import from India to balance it.  Currently Iran is selling 45 per cent of its oil in Indian rupees, but India will still find it difficult to pay for the rest.  India is trying to reduce its dependence on Iran and is sourcing its petroleum imports from Saudi Arabia instead, but this will entail a price to be paid, both economic as well as political.  It will make India overwhelmingly dependent on Saudi Arabia, which has been the primary supporter of Pakistan and an ardent proponent of radical Wahabi Islam.

Another significance of Iran lies in its capacity to stir up the entire Persian Gulf region and interfere with the movement of cargo to and from the region, which is home to 54 per cent of global oil and 40 per cent of natural gas. It is also the source for a quarter of India’s imports and almost a fifth of India’s exports.  Moreover India as the largest beneficiary of global remittances cannot have instability in this region as most of the foreign exchange that comes to India as remittance originates in this region.

In addition, there is no denying the deep influence of Iranian culture, language and religion on India.   In recent times, Iran, the largest Shia state, has emerged as the undisputed leader of Shia Islam and over 25 million Shias in India seek theological guidance and strategic direction from it. Cities like Lucknow and Hyderabad have emerged as significant centres of Shia thought and people in these cities have strong emotional bonds with Iran. India’s tiny but economically powerful Zoroastrian community also views Iran as a destination for pilgrimage.

It is therefore quite clear that India is in the throes of a serious dilemma, it needs both the US and Iran for its growth and development.  The best option for India would be to try and bridge the gap and bring the two seemingly intractable foes closer.  It may not be as difficult after a clear declaration by Iranian supreme leader that nuclear weapons are immoral and not sanctioned in Islam.

Iran’s Nuclear Paradox

Iran’s nuclear ambitions have dominated the western policy makers as it promises to alter the geopolitical dynamics of West Asia with concomitant impact on global nuclear equations. As per  western estimates it would escalate the threat matrix for Iran and provide impetus to Arab countries joining the race for nuclear weapons. The Persian vs Arab bomb race would heat up aided by the AQ Khan Wal-Mart of Pakistan. A combination of deterrence and containment might eventually be what the U.S. is forced to do, since it seems unlikely that the U.S. will succeed in dissuading Iran from going nuclear. The global and regional implications of such a race are ominous and merit continued efforts at preventing Iran’s ambitions without starting a new war.

Understanding that Iran’s actions and behaviour are rational, or at the very least not entirely irrational, should help in thinking through whether a nuclear armed Iran poses an existential threat to Israel and whether the conventional doctrines of nuclear deterrence and containment might have any traction in the context of the Middle East. Iran’s nuclear programme is as much about national prestige and regional standing as strategic interest. The current Iranian leadership would probably prefer to be isolated with the bomb, than on warm terms with the international community without the bomb. 

Global Equations

Stability of the region (Afghanistan specific) without extra regional powers like US would depend on the alignment of power between two camps: Iran, India and Russia on one hand and China, Pakistan and Saudi Arabia on the other. It is opined that to maintain reasonable balance of power America will have to play the swing state between the two blocks.  It is a result of this growing schism between America (with Israel mounting the pressure) and Iran which is realigning anti-American forces such as Russia, China and Pakistan thus marginalizing any US efforts to play the swing state. In either case, Russia, China and Iran have stepped up activity to fill the post 2014 vacuum in Af Pak. The acrimonious interplay between the “Sunni block” (Saudi Arabia, Turkey,  Qatar, and the UAE) against the “Shiite block” (Iran, Iraq, Syria, and Lebanon) accentuates the regional fault lines further.

Regional Implications

 Arabs cannot accept a nuclear-armed Iran because this would mean Persian superiority over the Arabs. Secondly,  if Iran obtained nuclear weapons there would emerge a balance of power between Iran and Israel. However, Iran’s main goal is not confrontation with Israel but with the Arab countries, especially the Persian Gulf countries. So it is clear to the latter that Iran is a menace to them in the first place rather than to Israel.

Turkey, though secular and protected by NATO umbrella, may want to build a capability of their own to counterbalance Iran’s would-be bomb. Muslim countries of the ex-Soviet Union, such as Azerbaijan, which is a predominantly Shia country, and Uzbekistan have a direct stake. Those are only some of the countries that could be threatened by nuclear-capable Iran. The Shia crescent is likely to disturb the equations in Iraq, Bahrain Afghanistan and Pakistan. The Chinese fear that in case Iran got caught in a conflict they would lose their oil market and not receive cheap and stable oil. Given China’s increasingly closer energy and economic ties with Iran, Beijing is thus caught in a dilemma vis-à-vis the issue of uranium enrichment in Iran.

Indian Policy Options

India is already on the nuclear radar of China, Pakistan, Russia and US. Another name in the list would materially make little difference but would severely impinge upon its energy security (both from Arabs and Iran) and be an anathema to its Af Pak and connect Central Asia Policies. Thus it is in Indian interest to diffuse the tensions between the West and Iran while promoting peace in the region.

The key question remains whether India has the requisite bandwidth to ensure reproachment between US and Iran. There is a school of thought which argues that India should not get involved in the US – Iran feud and let Russia and China take care of it.

Secondly, Ambassador Ishrat Azziz articulates that India should stand firm in stating that the IAEA should be the agency that should deal with Iran’s nuclear profile. If an anti-Iran resolution or a resolution perceived by Iran as against it comes up for vote in the UNSC, India must abstain and avoid taking sides. If it is proved that Iran has enriched to higher percentages other than for peaceful purposes, then India might have to take a stance.

A nuclear Iran ultimately may be a far less dangerous proposition to starting a war to prevent the Iranian bomb.

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