Dinesh Kamath's Editorial 'US provides temporary relief to India' that was published in Newsband

US provides temporary relief to India

The U.S. administration has decided to grant India and seven other countries waiver on Chabahar and on oil purchases from Iran and this brings relief, although temporarily. This will help the Modi government tide over until the general elections, without any major oil price shocks. The waivers announced cover Indian investment in Iran’s Chabahar port and the plan to build a railway line from Chabahar to Afghanistan to facilitate trade.

Both India and China, Iran’s two biggest oil importers, have been extended waivers. The European Union, Russia and China have also been working on a “special payment mechanism” to circumvent sanctions. But they have yet to launch it, limiting India’s options. Moreover, despite the waivers from the U.S., India will still face the impact of the U.S. sanctions, both on oil and on its investment in Chabahar, as very few international companies may be willing to undertake contracts.

India has lost its moral leverage because it chose to reduce its oil intake from Iran, and entered into negotiations for alternative fuel supplies from Iran’s rivals in the Gulf. This should not affect Delhi-Tehran ties in the long run since we had to put national interest first when we dealt with any nation and on the same side we had to be ready to face challenges that the U. S. or any other country threw at us. Sanction on Iran on crude oil export is removed for temporary period. What will happen after that? India is one of major importer from Iran. India should discover some options.

Some Indians expected India to stand its ground against such "unilateral sanctions". India did not. No major country around the world except US's own declared allies like Japan honoured it. Non-compliant nations include India's declared rival China, Russia, EU, and Turkey. Has this capitulation on India's part amounted to India’s fall from grace at the world stage? In 2015 when the major powers negotiated the Iran Nuclear Deal, the format used was P5+1, that was, all the five permanent members of UNSC plus one member. By any definition, the Plus One slot should have gone to India. Bit instead, they gave it to Germany. Was this because of India’s tendency to bow down to the US? Does India have any other choice? No!