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Last Updated : Nov 06, 2018 02:58 PM IST | Source: Moneycontrol.com

Opinion | India has taken the right approach on US sanctions against Iran

It is clear that India’s long-standing agenda on Iran is not being junked. New Delhi’s go-slow, wait-and-watch approach is a pragmatic one falling between defiance and surrender

Moneycontrol Contributor @moneycontrolcom

KP Nayar

High decibel drumbeats by the Trump administration in Washington designed to subdue Iran economically through wholesale sanctions have led to a mistaken popular conclusion in India. This mistaken conclusion is that since the United States unilaterally withdrew from the Joint Comprehensive Plan of Action (JCPOA) — popularly known as the Iran nuclear deal — six months ago, the Islamic government in Tehran has been sitting idly, and is helpless against the world’s biggest economy and only superpower.

Such a view misses the point that Iran’s revolutionary government has survived 40 years of America’s wrath without making any compromise with what the mullahs in the Shia holy city of Qom have christened the “Great Satan”, namely the US. If anything, a couple of years of relief from severe sanctions following the 2015 nuclear deal, has strengthened Iran’s ability to withstand US sanctions more than at any time since Ayatollah Khomeini brought down the Pahlavi dynasty in 1979.

For example, anticipating this week’s crackdown on international banking transactions related to Iranian businesses —including oil sales — Tehran has almost finalised arrangements to use the Russian equivalent of the Society for Worldwide Interbank Financial Telecommunication or SWIFT. It is known by its Russian acronym SPFS, translated as System for Transfer of Financial Messages. Russian President Vladimir Putin’s aides began working secretly on this system in 2014 when they sensed that Washington’s creeping sanctions against Moscow would eventually threaten Russia’s access to SWIFT as a way of crippling Russian oil and gas exports.

In May, Elvira Nabiullina, governor of the Central Bank of Russia, formally rolled out SPFS at the St Petersburg International Economic Forum, a meet which Prime Minister Narendra Modi addressed in 2017. It is widely believed that India’s payments to Russia for the recently-concluded agreement for the purchase of the S-400 missile defence systems are being transacted through SPFS as a guarantee against disruptions caused by Washington’s sanctions against Moscow.

Till the time of writing, the ministry of external affairs (MEA) has not reacted to the latest round of US sanctions against Iran. However, recently speaking at a regional connectivity conference in New Delhi, foreign secretary Vijay Gokhale said that in addition to developing the Chabahar Port in Iran as India’s gateway for onward connectivity to and from Afghanistan and Central Asia, “we might also need to pursue the development of a rail line from Chabahar to Zahedan (also in Iran) at some future stage.”

The geographical significance of Gokhale’s assertion is that Afghan cargo can then be moved from Zaranj in Afghanistan to Zahedan through existing networks and then transported by the proposed rail line to Chabahar to be exported to India or other markets. Gokhale’s statement virtually on the eve of US sanctions lends itself to two conclusions. One is an unstated Indian assessment that the sanctions will fizzle out — just like most unilateral sanctions in history have — and will eventually become ineffective. Second is the possibility of Donald Trump being a one-term president. If Trump is defeated in 2020, the Iran scenario may change altogether. Either way, it is clear that India’s long-standing agenda on Iran is not being junked: a go-slow, wait-and-watch approach is on the cards.

India’s best option is to work closely with the European Union, especially France, Germany and Britain on this issue. All of them are US allies but have decided to continue to adhere to the JCPOA. For India, it is a more pragmatic option than acting alone or appearing to go along with Russia or China. Within the Oval Office, on the Iran issue, both Russia and China are like red rags to a bull.

Two days before Washington announced its sanctions, the EU High Representative, Federica Mogherini, met with the foreign and finance ministers of France, Germany and Britain, but their joint statement was released only on Monday after the latest US sanctions went into force. It declared “our aim to protect European economic operators engaged in legitimate business with Iran, in accordance with EU law.”

More significantly from an Indian view, it said “our work continues, including with Russia and China as participants to the JCPOA and with third countries interested in supporting the JCPOA.” India’s interests lie in being one of those “third countries” and taking the road of pragmatism falling between defiance and surrender to US sanctions which are illegal under international law.

(KP Nayar reported from Washington as a foreign correspondent for 15 years. Views are personal)

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First Published on Nov 6, 2018 02:58 pm
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