US Iran crisis - the India angle

The latest edition of the gulf crisis between Iran and America has put India in a spot. At the best of times,  a very delicate balance needed to be maintained when dealing with any country in the region. India has had to play a balancing act with Saudi Arabia, Iraq and Qatar on one side, and Iran on the other. It cannot afford to take sides in this conflict. It has to watch from the sidelines and hope the crisis does not spill over into the rest of the region. It’s a complex chessboard and with many players. Maintaining diplomatic relations with all the players in the region is like walking on thin ice at the best of times.

Iran is India’s largest supplier of crude oil. India also purchases considerable amount of crude from Saudi Arabia, Kuwait and Oman. So India’s crude basket is well spread in the region. Iraq is a recent supplier which came into the picture after India stopped buying from Iran due to American sanctions. Recently the USA has also become a supplier of crude. This has diversified India’s oil purchases which may or may not be strategically significant, but it is said, that this purchase is a consolation for the Trump administration in order to play down its refrain against India regarding the balance of payments between the two countries.

India has been developing the Chabahar port in Iran as a gateway to landlocked Afghanistan, as Pakistan is  not considered to be a dependable conduit for passage of goods. The project got delayed due American sanctions on Iran on account of its nuclear program. Recently however, the US was willing to exclude this port from the sanctions on the condition that the Revolutionary Guards of Iran are in no way connected to the project. This port is in direct competition to the Gwadar port in Pakistan’s Balochistan province, which is being developed by China as a part of their CPEC project (China Pakistan Economic Corridor), and which China wants to continue into Central Asia and Europe. The current crisis has cast a shadow over the Chabahar project. This project is crucial for India, both as a corridor to central Asia and as an alternative trade route to what China is building in Pakistan. Now India’s apple cart will certainly be affected if matters get out of hand. An encouraging development is  that the call President Trump made to PM Modi to discuss the situation. It shows that the US is sensitized to the concerns of its allies in the region. It knows that India is directly affected by any disruptions in the gulf region. 

There are other more subtle factors which have had their effect on Indo Iran relations. Iran is not happy as India has taken a long time to develop the Chabahar port. This happened due to American sanctions on Iran. No international company was ready to invest in the port or even provide equipment for the project as that would bring US retaliatory action. Work on the project started only after the US and Iran signed their treaty which constituted a delay of several years. The Trump administration recently had shown its readiness to exclude the port from the the re-imposed sanctions. But after the US drone strike which killed the Iranian General Suleimani, the project has come under the shadow of war clouds again. Iran has indicated that if India is unable to take up the project work expeditiously, it will consider handing it over to China for completion. This does not fit anywhere into India’s plans, as it would thwart India’s primary objective of a trading route with Afghanistan and central Asia. The region is throwing new challenges and it remains to be seen how Indian foreign policy deals with them. The recent news that Iran has pulled its punches and pared down its attack on US bases in Iraq should come as a relief to all in the region. Since this retaliatory attack by Iran on American assets did not kill any personnel, but only damaged some structures, it can be reasonably assumed that the leadership in Iran is taking action to vent public anger, and that it is fully aware of the consequences of escalating tensions. There is too much at stake here for any country to take unilateral action.  War is simply not an option.

The tension in the region appears to be subsiding but the situation is fluid and there are new developments happening everyday. It would not be wise or prudent to try to predict anything, however obvious it may look. Hence this article may have to have a sequel, as and when the turn of events merit.