India between hill and gulf

The appointment of two experienced people, by President Obama, John Kerry and Chuck Hagel, as US Secretary of State and Secretary of Defence respectively is of immense significance in the current global scenario, and those at the helm of foreign policy in India are likely to keep a close watch on how Obama contends with some extremely challenging global issues. The Secretary of State designate’s policy on two issues will be observed closely in India, Pakistan and Iran. Many in New Delhi believe, that Kerry is a tad toosoft on Pakistan. They cite the Kerry-Lugar-Bergman act passed in 2010, which states that the US should provide $1.5 billion annually as civilian aid to Pakistan, to reinforce their point. Significantly however, Kerry also pushed the envelope for the Indo-US nuclear deal.

On the issue of Iran, Kerry has backed the Obama administration’s approach of applying sanctions on Iran, for carrying on with its nuclear programme, while one of the ostensible reasons for Hagel being appointed Secretary of Defence is that in spite of being a Republican, he has gone against his party line and backed the President on important foreign policy issues such as Iran and Israel. While Washington’s cosying up to Islamabad may not please many in New Delhi, a more nuanced US approach towards Iran would certainly be in New Delhi’s interest for a myriad of reasons. Firstly, of course India has invested heavily in the Chabahar Port in Iran, which will help New Delhi get access to Afghanistan and Central Asia. Secondly, Istanbul has ignored New Delhi in recently held Af-Pak negotiations between the leadership of both countries.

Turkish President Abdullah Gul hosted the talks between Afghan President Hamid Karzai and his Pakistani counterpart, Asif Ali Zardari. While India’s National Security Advisor is likely to visit Turkey next month to put forward New Delhi’s concerns, the decision to keep out India has peeved the latter. Tehran, whose relations have been strained with Istanbul in recent times, on the other hand has been supportive of India’s involvement in the Af-Pak process and is important in this context.

Thirdly, while the US and EU have imposed heavy sanctions against Iran’s energy sector, with oil imports from Iran being prohibited by the US, India has reduced oil imports from Iron, but grey areas in the sanctions were well utilised, and New Delhi made it clear to Washington, that ending economic ties with Iran suddenly was not possible. In spite of these sanctions, New Delhi and Tehran have also been exploring trade in other areas. In addition to interactions between the political leadership of both countries, business men from both countries too have been seriously exploring new opportunities in new areas for pushing the bilateral economic relationship.

The close political and economic relationship between both countries is evident from the fact that as a consequence of its health care system being drastically affected by international sanctions, Tehran recently turned to India with an urgent request for 28 life saving medicines – Iran’s request was duly forwarded by Indian officials to pharmaceutical companies. Indian Pharma giants such as Ranbaxy, Cipla, Glenmark and Ind-Swift laboratories have already consented to supply the drugs. It would be pertinent to mention here, that during a recent visit to New Delhi, the country’s National Security Advisor had repeatedly emphasised the special significance of the Tehran-New Delhi relationship, and also the fact that the sanctions imposed on Iran are an opportunity.

What is surprising is that, in spite of Obama being on a stronger political wicket, after having been re-elected, the US policy towards Tehran remains the same. Washington along with the EU have in fact imposed even tougher sanctions against Tehran, and those doing business with it, in the past few weeks. US businesses have off late become even more strict with business entities in other countries having business linkages with Iran. Recently, a pension fund California Public Employees’ Retirement System (CAlPERS) withrew its holdings from Petronet LNG. CAIPERS has also stated that it will not invest in Oil India and ONGC, since both work closely with Iran. CAIPERS is continuing however with its investment in Bharat Petroleum Corporation Limited (BPCL), which has categorically stated that it has no ties with business entities in Iran. Such strict sanctions against Iran raise a number of important issues. Firstly, New Delhi cannot ignore either Tehran – with which it has historical linkages – nor can it overlook the fact that Washington DC, is an important strategic partner. Second, if the US and EU carry on with their sanctions against Iran in a similar manner, it is bound to have an adverse impact on Indo-US  economic ties. Three important members, China, Russia and India, are likely to meet in a few days in New Delhi to discuss threadbare the possible ramifications of the latest round of sanctions imposed by the US. All these countries have high economic stakes in Iran, and have political and economic interests in Central Asia and are key players in the ‘Silk Road’, in which Tehran’s role cannot be obliterated.

Fourth, if tensions between Iran and the US exacerbate, we may actually witness the emergence of new alliances. New Delhi would be hoping that 2013 does not witness escalation of tensions between the US and Iran, for they will have strong ramifications for South Asia and India.

Tridivesh Singh Maini is a New Delhi based columnist and independent foreign policy analyst
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