Originally Published 2012-02-04 00:00:00 Published on Feb 04, 2012
While India would be hoping that the reported secret talks between the US and Iran succeeds, avoiding a conflict, New Delhi could take a leaf out of the Chinese and Japanese strategy of reducing its exposure to Iranian oil in return for a waiver from US sanctions.
The US-Iran Standoff and India
The US-Iran standoff is showing signs of unfolding into the first major geostrategic crisis of the year. Though the US and Iran have not been the best of friends for many decades now, over the last few months, hostility has reached new heights. This escalation in hostility has been driven in the US over Washington’s continued concerns over Iran’s nuclear programme, the alleged plot to assassinate the Saudi ambassador in the US and the attack on the British embassy in Tehran. On the Iranian side, several of its nuclear scientists have been killed in the past few months and its economy, which is dependent on oil revenues, would falter if it cannot sell oil due to US-led sanctions. The continued antagonism has led to the US unilaterally imposing more sanctions on Iran, targeting its Central Bank and petrochemical industry. American allies like Canada and the UK as well as the EU have followed suit. Iran responded by threatening to close down the straits of Hormuz, through which a substantial amount of the world’s oil supplies passes and thus threatening a dramatic increase in world oil prices. Khamenei has further warned that "threatening Iran and attacking Iran will harm America ... Sanctions will not have any impact on our determination to continue our nuclear course ... In response to threats of oil embargo and war, we have our own threats to impose at the right time….Any military strike is ten times more harmful for America". So the war drums are beating in both the US and Iran.

However, one needs to keep in mind that both the US and Iran are due for major elections this year: while Iran has Parliamentary elections on 2 March, the US Presidential elections are in November. In the US, the Republican Presidential candidates are calling President Obama weak and his Iran policy inadequate. In fact, Iran is rapidly emerging as the major foreign policy issue in this year’s US Presidential elections. A recent Washington Post-ABC poll found that 48% of the respondents disapproved of President Obama’s Iran policy. This impact of this pressure could be seen in President Obama’s State of the Union address last week when he warned that "no options were off the table" to prevent Iran from acquiring nuclear weapons. On the other side, in Iran, as Trita Parsi says, "the fear of looking soft on America is as paralysing as the fear of looking weak on Iran is in Washington DC". So much of the rhetoric on both sides can be explained to some extent by contestants and parties jostling for political space and votes.

Iran has been an irritant in Indo-US relations for quite some time now, with some commentators even suggesting that Iran has become a kind of "litmus test" in Indo-US relations. So the current impasse could affect Washington’s ties with New Delhi. While India has legitimate concerns about the emergence of another nuclear power in its neighbourhood, on the issue of US sanctions on Iran, it has taken a strong stand. India has historically been against unilateral sanctions and this, coupled with its energy security imperative, are two of the major factors behind India’s position on the issue.

New Delhi has already responded saying that it will not join the US-led sanctions. India imports about 12 percent of its oil from Iran, which is the second largest oil supplier to India behind Saudi Arabia. As Finance Minister Pranab Mukherjee said during his visit to the US, "It is not possible for India to take any decision to reduce the imports from Iran drastically, because among the countries which can provide the requirement of the emerging economies, Iran is an important country amongst them". Similarly, on US sanctions, Foreign Secretary Ranjan Mathai had also said earlier that, "We have accepted sanctions which are made by the United Nations. Other sanctions do not apply to individual countries. We don’t accept that position." He added that an Indian delegation would travel to Iran to "work out a mechanism for uninterrupted purchase of oil from Iran." Reports suggest that Iran has already agreed to accept 45 percent of its revenues from oil exports to India in Indian rupees to circumvent restrictions on dollar-denominated trade.

New Delhi’s stance could damage relations with Washington if both countries do not watch out. Indo-US relations are too important to both countries to be held hostage to differences over Iran. The US needs to understand India’s compulsions vis-à-vis its energy security, domestic political compulsions and its future role in Afghanistan and India the US’ concerns about proliferation in a volatile region and the security of Israel.

Reports in the American media suggest that the US and Iran are engaged in secret talks to solve the impasse. India would be hoping that these talks succeed and Washington and Tehran settle their differences, avoiding a conflict which could imperil regional and global stability. Meanwhile, it could take a leaf out of the Chinese and Japanese strategy of reducing its exposure to Iranian oil in return for a waiver from US sanctions.

(The writer is a Researcher at Observer Research Foundation)

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