India wary, experts worried over US exit from Iran N-deal

NEW DELHI: New Delhi on Wednesday chose to tread cautiously on the US decision to dump a landmark nuclear deal with Iran, as foreign policy experts warned of an adverse impact on India.

“All parties should engage constructively to address and resolve issues that have arises with respect to the JCPOA (Joint Comprehensive Plan of Action),” external affairs ministry spokesperson Raveesh Kumar said.

Experts, however, said the US exit could lead to strategic and security realignments in the region that would hit India’s interests as Iran is its third largest oil supplier and a vital strategic partner.

US President Donald Trump said late on Wednesday Iran sanctions would go into effect “very shortly”. The return of sanctions on Iran could also put pressure on fuel prices that would affect the economy that is already feeling the pinch of rising crude prices.

“Such sanctions always impact oil trade as well investments but there is time to think about alternatives,” said Talmiz Ahmad, former diplomat and an expert on West Asia and energy diplomacy.

Not just crude but Iran is also key to India’s transport corridor to Afghanistan and Central Asia that bypasses Pakistan.

New Delhi would wait and see how other countries react to US’ decision and the steps Trump administration would take in coming months, an official in the external affairs ministry said on condition of anonymity.

But experts were quick to point out the fallout.

After Iranian President Hassan Rouhani’s visit to New Delhi in February, the first by an Iranian president in 10 years, India agreed to increase its oil import. It is expected that the imports would be in the range of 398,000 barrels per day in 2018-19.

Tehran supplied 18.4 million tonne of crude to India between April 2017 and January 2018.

“The US still controls the international financial and banking systems. So it’s about not being able to make payments through the banking channels once the US sanctions kicks in. Unless of course the European countries now devise a system to circumvent this,” said Ahmad.

Then there is the danger of secondary sanctions through which Trump administration can prevent foreign countries from accessing the US market unless they go along with the sanctions.

“The US sanctions will likely impede India’s transportation corridor to Afghanistan and Central Asia via Iran, including completion of the Chabahar port modernisation project,” strategic affairs expert Brahma Chellaney said.

Chabahar is a key connectivity project in which India is heavily invested with strategic intent. It gives India sea access to Afghanistan bypassing Pakistan.

Both Chellaney and Ahmad said the US decision was fraught with unforeseen circumstances that would have a bearing on India and regional stability.

“Trump is using the nucleardeal withdrawal to destabilise and oust the Iranian regime. This will have adverse security implications for the region and for India in particular,” said Chellaney. It would compound India’s foreign-policy challenges. “First, the US will likely ease pressure on Iran’s neighbour Pakistan, which could become a staging ground for covert US operations into Iran,” he said.

The US preoccupation with Iran and West Asia would allow China more space “to pursue its recidivist actions”.

The Obama administrations along with the UK, Russia, China, France and Germany had in 2015 reached an agreement with Iran that lifted sanctions in return for Tehran limiting its nuclear programme.

AFTER IRANIAN PRESIDENT HASSAN ROUHANI’S VISIT TO NEW DELHI IN FEBRUARY, INDIA AGREED TO INCREASE ITS OIL IMPORT