Messy diplomatic order
Capricious US trade and diplomatic policies seem to have thrown world diplomacy into disorder. Countries in Europe and Asia are getting increasingly confused and uncertain about staying 'allied' with the US. With President Donald Trump appearing as a highly unpredictable 'ally' even to traditionally close Britain, Germany, and France, nations are confused over a changing diplomatic order. Russia and China have certainly gotten closer to protect themselves against the US whim-whams in their region. India seems to be at its wit's end as the US is pushing hard to block imports from India under one pretext or the other, restrict movement of intellectual persons, move more exports to India and exercise penal restrictions on trade with countries not in sync with US policies. The pressure threatens India's independent trade and diplomatic policy pursuits.
India is so fed up with the US threats on the trade and economy fronts that on last Thursday, it took an unprecedented retaliatory action raising import duties up to 100 per cent on five products, including wheat, shelled almond, walnut, and protein concentrate, imported mostly from the US. It invoked "emergency powers" to increase import duties under Section 8A of the Customs Act. Earlier, India told the WTO that it proposes to raise duties by up to 100 per cent on 20 products such as almonds, apple and specific motorcycles imported from the US if Washington does not roll back high tariffs on certain steel and aluminium items. The US has moved the World Trade Organisation (WTO) against India's export schemes. India, along with a number of countries such as China and Russia, has dragged the US to WTO for creating artificial tariff barriers. Under the circumstances, no one is too sure about the possible outcome of a US-India 2+2 dialogue that may be held in July.
Meanwhile, the unilateral US pull-out of the international nuclear pact with Iran, followed by its threat, last week, to impose sanctions on Tehran and also on foreign companies dealing with Iran are causing new headaches for oil-starved India. Other signatories of the international nuclear agreement with Iran — France, Germany, Britain, Russia and China — too are concerned. They disagree with the US and say they would try to salvage the deal and keep Iran's oil trade and investment flowing. India is highly concerned about the US action against Iran. Because, it is the second largest oil importer from that country, after China. India is also under agreement with Iran to construct the Chabahar port, the first part of which was completed in December. India and Iran agreed to develop Chabahar on the Gulf of Oman outside the Strait of Hormuz, near Iran's border with Pakistan. The port and road project, when completed, is expected to give India a direct access to Afghanistan and oil-and-gas rich central Asia, bypassing Pakistan.
Now, here comes the possibility of a US embargo on countries and companies dealing with Iran. Indian Oil Corporation (IOC), the largest importer of Iranian oil, may be forced to turn to other oil exporting countries, including the far-flung US, to prevent supply disruptions, further pushing up oil import costs. IOC planned to buy 140,000 barrels per day of Iranian oil during this financial year and has an option to buy an additional 40,000 bpd. Indian refiners have raised oil imports from Iran after the latter agreed to steep shipping discounts. IOC is now thinking of tapping the spot market to buy US oil. IOC recently bought three million barrels of US oil through a tender.
Like the rest of the world, India too was stunned on last Thursday when President Trump cancelled his planned summit with North Korean leader Kim Jong-un in Singapore on June 12, blaming the increasingly hostile rhetorics from Pyongyang. The US president said he was pulling out of the meeting because of the 'tremendous anger and open hostility' in a recent statement from Kim. Even as the summit date was nearing, both the leaders were busy engaging themselves in shadow boxing and brinksmanship, playing hardball.
The sudden cancellation of the Trump-Kim summit stunned almost everyone. Yet, within 24 hours of his announcement, President Trump sang a different tune, saying the summit could still be on. On Saturday, May 26, Kim Jong-un met South Korean President Moon Jae-in for the second time in a month, holding a surprise summit at a border truce village to discuss Kim's potential meeting with President Trump. Global leaders in Europe and Asia are trying to reorganise their diplomatic policies and usher in new dialogues in the interest of peace and security in the region.
This could probably explain Russian President Vladimir Putin's initiative to rope in Prime Minister Narendra Modi, earlier in the week, over their informal meet for almost six hours at Bocharev Creek in Sochi, to work on a "non-bloc security architecture" in the Indo-Pacific region. This is despite the fact that India is working with the US, Japan and Australia to bring stability for a rules-based order in the region. India is engaged with the US and its allies Japan and Australia across bilateral, trilateral and quadrilateral formats to bring stability in the Indo-Pacific region and make it inclusive amid China's ambitions and BRI (belt and road initiative) projects.
Modi and Putin now agree to a proposed document on a fight against extremism, separatism and terrorism, to be signed at the Shanghai Cooperation Organisation (SCO) summit in China next month. Russia is keen to connect the Indo-Pacific region with its initiatives in the Eurasian hemisphere. Russia views India as a key player in that process. The developments may see the world order taking a new direction if the US continues with its freak diplomatic manoeuvres across the globe, including with countries such as Iran, the two Koreas and Turkey.
(The views expressed are strictly personal)