It has been disappointing to see the trend of reportage and commentary over the US-Iran confrontation, which has the potential to escalate into a war, with frightful implications for Iran, the Gulf region, India, the US and the world economy. It was shocking to hear a retired diplomat ask: Why should India put all its eggs in the Iran basket? Of course, it is not a question of putting our eggs in the Iranian basket or in the American one. It is important to understand the origins of this confrontation, the merits and demerits on either side, the likely scenarios, the likely impact on India, and last, but not the least, what India can and should do to prevent aggravation leading to a regional conflagration.
Till the 1979 Revolution, Iran, under Shah Mohammed Reza Pahlavi, as the closest ally of the US in the region after Israel, administered the Pax Americana there. Post-Revolution Iran under Ayatollah Ruhollah Khomeini and the US under President Jimmy Carter were prepared to work together. Carter’s National Security Adviser Zbigniew Brzezinski met Iran’s Prime Minister Mehdi Bazargan in Algiers on November 1, 1979 and agreed to work together. However, Bazargan wanted Washington to send the Shah back to Iran for trial. The decision to let the Shah into the US was taken by Carter against the advice of Secretary of State Cyrus Vance. Brzezinski rejected the demand and talks ended inconclusively. Within 72 hours, the US Embassy in Tehran was taken over by Iranian revolutionaries. The hostages were released 444 days later, after Carter lost the election to Ronald Reagan. Ever since the takeover of the embassy, Washington has imposed sanctions on Iran and treated it as an enemy state. Naturally, Iran has paid back in the same coin, calling America “Great Satan”.
As Iran under President Mahmoud Ahmadinejad (2005-2013) pursued uranium enrichment for “defensive purposes”, the European powers and the US wanted to come to an agreement with Iran to limit its enrichment activities and production of heavy water. The JCPOA (Joint Comprehensive Plan of Action) finalized in 2015 between Iran and the P5, plus EU and Germany, provided for an intrusive inspection by the International Atomic Energy Agency (IAEA) to prevent Iran from making a bomb. President Barack Obama disregarded the objections of Israel and Saudi Arabia, both of whom wanted to keep Iran as a pariah state forever.
President Donald Trump walked out of the JCPOA on May 8, 2018. As a candidate he told his supporters Obama had entered into a ‘very bad agreement’. However, as president, he did not ask his National Security Council to examine the pros and cons before walking out. It was a decision taken arbitrarily and was opposed by his Defence Secretary, General Jim Mattis, who later resigned over policy differences. Iran showed patience and reaffirmed its compliance with the deal but wanted European powers to devise a mechanism to continue trade and economic relations with them.
The EU and the EU3 (Germany, France, and the UK) urged Trump not to walk out, but in vain. They responded positively to Iran’s demand for continued trade and economic relations, but have not delivered so far, primarily because they do not want to defy Washington. The Single Payment Mechanism, called INSTEX (Instrument in Support of Trade Exchanges) has not met Iran’s expectations as it cannot deal in oil. Iran’s oil export has fallen sharply.
Russia and China have expressed disapproval of Trump’s action. China has said that it would continue importing oil from Iran even though the waivers issued by Washington have not been renewed. However, the non-US signatories have not formally got together to take a common position against Washington or to come out in support of Iran.
The two-day G-20 meeting in Osaka did not discuss the crisis in the Gulf and apparently none of his interlocutors urged Trump to resort to diplomacy.
It will be naïve to hold that because both Iran and Trump have said neither wants a war, there will not be a war. Wars are often the unintended consequences of actions.
Iran has exceeded the 300 kg limit on the uranium it can hold and has made it clear that unless EU3 makes it possible for Iran to sell oil, Iran will start enriching uranium beyond the permitted limit 3.67%. Iran’s assumption that the EU3 can be pressured into defying the US is possibly mistaken. The danger is that Iran might proceed further and throw out the IAEA inspectors and then EU3 will abandon Iran and join with the US in re-imposing sanctions.
If the US resorts to bombing Iran, it will be naïve to assume that Iran, the weaker party, will surrender with alacrity. Iran will retaliate through its regional proxies (the Hamas in Gaza, Hezbollah in Lebanon and the Shia militants in Iraq). Iran might also close the Straits of Hormuz, through which traverse 17 million barrels of crude a day, mainly from Saudi Arabia, Kuwait, UAE and Iran. Oil prices will shoot up and Trump’s popular ratings will plummet.
Iran is unlikely to sit down with the US at a negotiating table unless Ayatollah Khamenei, their Supreme Leader, permits the government. Iran’s assessment that Trump wants nothing short of surrender is not wrong. Iran’s economy will shrink, and its people will suffer immensely.
China has stated that it would continue importing oil from Iran. When China gets closer to signing a deal to end the trade war with US it might yield to Washington on import of oil from Iran. There is also the possibility that the US will fail to get any resolution passed in the Security Council penalizing Iran, as China and Russia will not agree.
So far, Iran has not asked India to leave Chabahar port, an essential link for India with Afghanistan and Central Asia. The work in Chabahar has slowed down. If the hardliners take over in Iran, there is a risk that India, having stopped import of oil from Iran, might be asked to wind up its project in Chabahar. If hostilities break out, and the region gets destabilized, India might have to embark on the impossible task of evacuating the eight million Indians in the Persian Gulf region.
Out-of-the box thinking is required. What is required is not bringing the two sides to the negotiating table, but making it possible for Iran to sell oil.
The principal importers of oil from Iran are China, India, South Korea, Turkey, Italy, Japan, Spain and France. Leaving out Italy, which is keen to be the closest ally of the US in Europe, suppose the other seven get together?
Let us conduct a thought experiment in classical diplomacy: One of the seven appoints a sherpa (special envoy) who visits the other six capitals, who also appoint sherpas. The seven sherpas work together and agree on a collective statement to be issued simultaneously from the capitals, telling Washington that they intend to buy oil from Iran. The US will not be able to apply sanctions against seven countries. The unipolarity in international finance and trade will be eliminated.
The question is who will appoint the first sherpa. Why not India?
