Why India must keep a hawk's eye on Donald Trump’s Iran policy

A lot of attention is being paid to US president-elect Donald Trump's policies pertaining to South East Asia. A less pro-active US will only lead to China enhancing its influence in ASEAN. As it is, a number of countries like Malaysia and Phillipines have taken a virulently anti-US stance.

All this is not great news for India, since it has been seeking to strengthen not just its economic presence in ASEAN, but also emerge as a strategic player in the region. The US and Japan have supported India’s pro-active approach towards ASEAN.

Going by some of Trump’s announcements during the election campaign, Washington under Trump may reconsider its approach towards the Asia-Pacific, and this would require a considerable recalibration of India’s approach vis-à-vis South East Asia and East Asia.

If there is anything which India really needs to watch out for carefully is Trump's policy towards Iran.

While on the Asia-Pacific he has made some strong statements, he has also left enough space for manoeuvre. With regard to Iran, Trump on more than one occasion has spoken about reversing the nuclear deal, which was signed between P5+1 and Iran, and was a brainchild of President Barack Obama.

Trump has dubbed this deal as the “the stupidest deal of all time", one that will “give Iran, absolutely, nuclear weapons". Trump's nominee to head the CIA, Mike Pompeo, had tweeted on November 17: “I look forward to rolling back this disastrous deal with the world’s largest state sponsor of terrorism.”

Both Pompeo and retired Army General Mike Flynn, who Trump has chosen as his national security adviser, are hawkish on Iran. Current CIA chief John Brennan has warned against such a measure and has dubbed Trump's proposal as "disastrous", arguing that scrapping of the deal will only push Tehran to restart its nuclear programme.

Nuclear deal and its relevance for India-Iran ties

Reduction of tension between US and Iran and relaxation of sanctions against the US had paved the way for enhancing India's economic ties with Iran, not just with regard to oil imports, but also the Chabahar Port.

Here it would be pertinent to mention that, even when sanctions had been imposed against Iran, India did not totally snap economic ties, though there was a considerable reduction and scaling down.

One of the major problems which India faced post sanctions was that it could not pay for its oil purchases in dollars, and both countries worked out a system whereby India could pay for nearly half of its oil imports in Indian Rupees - which were used by Iran for buying Indian goods.

Politically of course India did want to send the message that Iran was a valuable partner. In August 2012, then Prime Minister Manmohan Singh visited Tehran for the Non-Aligned Summit, much to the chagrin of the US.

Modi government and Iran

The Narendra Modi government, which has been aggressive in its outreach towards the Gulf Cooperation Council, has sought to capitalise on the opportunities which have arisen thanks to the nuclear deal. Not only has India increased its oil imports from Iran. A strong reiteration of this point is that in October 2016, oil imports were estimated at 789,000 barrels per day. This is nearly thrice the amount of oil imported in October last year.

During Modi's Iran visit in May 2016, an agreement was signed for India’s participation in the Chabahar Project. India according to this agreement would spend $500 million for development of the project, apart from investing in the Chabahar Free Trade Zone.

During the visit, India, Afghanistan and Iran also signed a trilateral connectivity pact. Commenting on the deal, Modi said: "It is a new foundation of convergence between our three nations. The corridor would spur unhindered flow of commerce throughout the region. Inflow of capital and technology could lead to new industrial infrastructure in Chabahar. This would include gas-based fertiliser plants, petrochemicals, pharmaceuticals and IT."

In this context, one of the key pacts signed during Modi’s visit was India’s participation in the creation of a railway line linking Chabahar with Zaranj in Afghanistan. Through this line India would get access to four key Afghan cities - Kandahar, Kabul, Mazar-e-Sharif and Herat. This would help India bypass Pakistan, which has refused to make India part of the Afghanistan Pakistan Transit Trade Agreement (APTTA).

The Heart of Asia Conference

During the Heart of Asia Conference in Amritsar, starting December 3, progress with regard to the Chabahar Port and trilateral connectivity between India-Afghanistan and Iran is likely to be high on the agenda.

The conference comes at a significant time. First, no one can be certain about Trump’s likely approach towards the US deal with Iran, and this could have an impact on India’s bilateral ties with Iran which are important in the economic and strategic context.

Second, India would like to send a message to Pakistan which, by continuously adopting a zero-sum approach, has chosen the path of conflict rather than benefitting from regional connectivity. One such instance of Islamabad’s zero-sum approach is keeping India out of the APTTA, even though Afghanistan has been backing India’s entry.

Conclusion

India has been able to deal with a number of strategic challenges. It has been able to balance its ties with Iran while also expanding relations with GCC countries. It remains to be seen whether it will be successful in its strategic goal of getting access to Afghanistan and Central Asia.

This will depend not just on brisk implementation by India, but Trump’s Iran policy as well.

Also read: It's in India's interest if Modi strengthens ties with Iran