Will Trump’s attitude towards Iran impact India?
US President Donald Trump walked out of the Iran nuclear deal. Trump’s
action comes in the face of
strong pleas from the other signatories to the accord like Russia, China,
France, Germany and the UK, and worsens an already tense situation in the
region. Trump has destroyed the
chances of any workable peace being achieved in the many conflict zones in the
region. Will this move weaken the US’s position as global policeman?
The Europeans blame the US. Trump bets that his ‘extreme sanctions’ will bring the Iranians to
their knees. That seems unlikely. Instead, it will provoke Iran into pushing
more resources into increasing its clout both in Iraq and Syria where it has
outmanoeuvred arch-rival, Saudi Arabia.
For India, the reintroduction of sanctions against Iran is bad news. Iran
is now India’s third largest source of oil. Apart from supply disruptions, a
further surge in crude prices will worsen India’s current account imbalance and
fuel inflation, at a time when the economy is just beginning to show signs of returning
to a high growth trajectory.
Trump, whose autobiography was famously called The Art of the Deal, has
shown that he’s more of a deal-breaker than a dealmaker. Trump’s withdrawing from
the Paris Climate Agreement, pulling out of the Trans-Pacific Partnership, giving succour to Asian countries worried
by China’s growing clout, trying to renegotiate the North American Free Trade Agreement
with Canada and Mexico – all these prove the point. The world is at the mercy of a US President.
Deal-making or breaking is acceptable in the context of business. But is
it right in politics? Can Businessmen presidents become statesmen presidents? They
need a long term global vision.
However, Commerce Secretary Rita Teaotia has assured that US President
Donald Trump’s decision to re-impose economic sanctions on Iran will not result
in any significant dent in India’s exports to the Islamic republic. “There were
sanctions in place for Iran for a number of years before they were partially
lifted by the Obama administration. That did not see a huge increase in exports
from India to Iran. I do not expect any major shift to happen in bilateral
trade now (because of the fresh sanctions),” Teaotia added.
The Ministry of External Affairs, however, is reaching out to other
Ministries and Departments such as Finance, Commerce, Ports and Petroleum to
work on a strategy to deal with the impact of the fresh economic sanctions
imposed by the US on Iran. They have yet to study the finer details of the
sanctions and how it would affect various facets of our relationship with Iran
such as our oil imports, our exports and also on-going projects such as the
Chabahar port that we are engaged in.
Commerce Secretary Rita Teaotia recently confirmed that the ‘rupee-real’
payment mechanism was still in place. However, Iran’s balance in the account
has dwindled since the previous sanctions were lifted in 2015 and payment in
Western currencies was allowed. It is important that India establishes a system
that would allow it to import oil from Iran without much hindrance, as it is
the third largest supplier to India after Iraq and Saudi Arabia.
The European Union (EU) opposes the US move as the former does not want
the nuclear deal to be disturbed. India is still hopeful that something will be
worked out between the Western powers and the effect of the sanctions may not
be severe.
But why India wants to keep cozy relationship with the Iranian regime is
anyone's guess considering the huge trade deficit India has with Iran more than
USD 9 billions every year and growing. The Gulf Arab countries have issued a
comment that countries should choose between the Gulf Arab countries and the
Mullah regime. Considering that millions of Indian expatriates are in the Gulf
Arab countries working and doing business, the Modi Government is putting these
millions at risk. Indians working in Iran are less than a thousand due to
severe regulations. The rupee trade was a complete failure and the rupee
balance after the nuclear agreement was paid to Iran in Euros. Prudence
dictates India should distance itself from Iran and replace Iranian oil from
some other source as soon as possible. Once this is done the Mullah regime will
understand that it takes two to play a ball game and stop fooling the Indians
with false promises of projects and trade
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