(This is a reprint from NewsBred).
United States wants India to cut down its oil imports from Iran which stands as its third biggest supplier after Iraq and Saudi Arabia. President Donald Trump has followed his pre-election promise with withdrawal from the 2015 Joint Comprehensive Plan for Action (JCPOA) which had enabled China, Russia, France, Germany UK, European Union and the US itself to dilute the economic sanctions against Tehran. Now the sanctions are back in place with the deadline of November 6, 2018 and the world is in turmoil, no less India.
The Trump administration has chosen a new way to browbeat the countries which don’t fall in line. Last August, it introduced CAATSA (Countering America’s Adversaries Through Sanctions Act) to scare those away from trade relations with “hostile” countries such as Russia, North Korea and Iran. International banks and companies which defy the sanctions would bear the brunt. Less oil imports from Iran would hike up the prices and import bills, not just of India but of many around the world. It would hit both inflation and Indian rupee. Since US dominates the re-insurance and payment gateways, bypassing them is difficult.
India’s dilemma is apparent. Before 2005, it paid $12-14 billion annually to oil bills by Iran. But signing the 2005 Indo-US Nuclear Civil Deal, gave New Delhi’s leash in US hands. India voted against Iran in the IAEA General Conference in September the very year; dithered on the Iran-Pakistan-India Pipeline and sounded the death knell of Turkmenistan-Pakistan-India (TAPI) gas pipeline project. By 2014, India had reduced the Iranian oil imports to $4 billion annually.
The US treasury methodically shut down the banking options for India who then began paying Turkey by cash which then converted it to gold bars and sent it across to Tehran. India was in no position to pay oil bills in US dollars. India did try the balancing act: while Reserve Bank of India (RBI) ceased dealing with Tehran-based Asian Clearing Union in 2010, it came to an understanding with Iran to pay half of its bill in Indian rupees in 2012.
But once the JCPOA came into being, India-Iran trade relations grew back to 2012 days. India also decided to pay out $6.5 billion it owed to Iran, held up due to sanctions. Modi government renewed the stalled Chahbahar port project. Its’ ministers made a beeline to Tehran with promises of oil and infrastructural projects. Iran obliged on its part by granting Oil and Natural Gas Commission (ONGC) the gas fields of Farzad B for exploration. The air of optimism only grew better when Iranian president Hassan Rouhani visited New Delhi this February with his oil minister Bijan Zanganeh. India pledged it would double its oil imports from Iran in 2018-2019. Iran, on its part, promised to cut down the freight by $1 per barrel. India pledged to increase import by 500,000 barrels a day.
But now comes the fresh US imposition. Even though foreign minister Sushma Swaraj has reiterated India would only abide by the mandates sanctioned by the United Nations (UN), it’s easier said than done. India and US have a booming trade of $140 billion which could take a grave hit, as well as around $31 billion of bilateral trade surplus advantage India has. Chahbahar port project, which could save millions in trade and increase Afghanistan’s tilt towards India, stands to lose steam. Besides, it just would give a bigger fillip to China to snug closer to Iran, shutting the doors on India.
India would be encouraged by the stand of UK, France, Germany who have expressed “regret and concern over Trump’s disruptive action. The Modi government meanwhile has started to flex its own muscles: in reaction to US postponing the 2+2 dialogue, India has declined US’ offer to host Defence Minister Nirmala Sitharaman. India also seems steadfast in increasing its military deals with Russia which faces similar offensive sanctions from United States.
The one fall-out of all this, including trade barriers ratcheted up by both US and India, is Modi government swinging back appreciably into the China-Russia zone. India has this strategic advantage where countries are looking to wow India rather than the other way around. However, India-US relations for the moment are several notches down than they have ever been since Trump came to power.
This is a reprint from Newsbred.
Indian prime minister Narendra Modi’s unscheduled stopover for his counterpart Nawaz Sharif to Pakistan is not symbolic alone. It has a domestic and international substance which would only annoy those who don’t want peace between two combustible nuclear-ed neighbours.
And who don’t want peace? We now know of forces who would like Middle East to be terrorist-infested; that in its second phase could export terror on to north, east and south of Eurasia. Russia, which has grappled with terrorism in Caucasus longer than any other nation; and China which is struggling with Uyghur Muslim in its Xinjiang region; fear such a flood of separatist trouble if Middle East is completely submerged with terrorists.
Pakistan, which has had a hand in creating the first lot of terrorists through its Inter Service Intelligence (ISI) in the 80s to drive out Soviets from Afghanistan (it’s all documented), is now in a historical correction mode. It’s more China than US-centric and has no interest in being the shoulder from which Washington fires its guns. The US drone warfare in Pakistan has lasted for almost a decade now. The tutelage of US for decades has yielded Pakistan nothing but mass killings on its streets and schools and the epitaph of a near-failed state.
Modi, like leader of any sovereign nation, has two compelling narratives: to ensure peace at its borders and to economically grow the country. There is no sense to remain mired in China-Pakistan vs India narrative (which of course is what imperialist forces of divide-and-rule would like) and miss out on all the infrastructural, gas and communications highways presently underway in Eurasia for its integration.
Hostile borders is what allows terrorism to flourish and which is a common fear of Russia, China, India and dare I say, Pakistan. A move to protect Eurasia’s security is what prompted the creation of Shanghai Cooperative Organization (SCO) in 2001. The Asian powers clearly saw the game of North Atlantic Treaty Organization (NATO) to spread to Asia and wreck the region (e.g Iraq, Libya, Syria etc) so as it never gets integrated and challenge the dominance of West.
Interestingly, both India and Pakistan are to be formally inducted as members of the SCO in 2016. Their cooperation is sought by SCO founders China and Russia who exert a considerable influence on Pakistan and India. Modi’s impromptu visit to Pakistan must be seen in this light. The parley of last few weeks in Paris, Bangkok and Islamabad has been a build-up for this Lahore bonhomie.
That all this has overtaken the preceding acrimony has been most pleasant. Pakistan had submitted three dossiers in the United Nations comprising alleged role of India in subversive activities in Karachi and Balochistan. India had cried foul when China didn’t allow 26/11 perpetrators to be listed as terrorists in UN books. The border skirmishes and killings had scaled up. All this has been too recent.
Economically, India wants its roads to lead deeper into Eurasia rather than be hemmed in by Pakistan and China. The recent signing of Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline was a sign of changing winds in the Indian subcontinent. Don’t be surprised if decks are also cleared in long-delayed Iran-Pakistan-India gas pipeline in 2016.
Modi would reap the most from this peace harvest. He has realized that domestic opposition would’ve only one stick to beat him up with: to show him as communal and promoter of “intolerance.” This clearly orchestrated Modi-demonizing method flares up before any state elections and is the handiwork of Marxist-Congress-Media-CIA “gang of four” in this country.
Modi’s overture to Pakistan has taken the sting out of poison-tipped arrows of opposition. It would be difficult to portray him as anti-Muslim after such a breezy outreach. They haven’t been able to pin him down on corruption—“intolerance” is the only hammer at their command. These destabilizing forces would now have to come up with something new.
It’s also time not to judge India-Pakistan relations on Kashmir alone. Kashmir would remain insoluble in near future. But Kashmir shouldn’t deny low-hanging fruits to the two neighbours.
The only solution to Kashmir would be to declare it a non-militarized zone just as it exists between North and South Korea. All conflicts would then go to the UN table and both India and Pakistan would be denied an arbitrary stance.
After Modi’s visit to Pakistan, the usual peace-bashers would be up to their tricks. You could hear of clashes at the border, terrorist attacks and compromised NGOs hogging the headlines. Mark them out and the newspapers which promote them. There are the enemies which lie within.