Iranian President Visits India - The Hindu (24.02.18)

(Latest Op-Ed First; Verbatim Compilation of The Hindu Op-Ed)

Adopting a ‘wait and watch’ approach (24.02.18)

Iranian President Hassan Rouhani’s visit this month was a subdued affair compared to Prime Minister Narendra Modi’s visit to Tehran last May. The reason is the differing preoccupations in both countries. The future of the Iran- P5+1-European Union (EU) nuclear deal (Joint Comprehensive Plan of Action, or JCPOA), concluded in 2015, has a Damocles’ sword hanging over it, given U.S. President Donald Trump’s visceral opposition to it. In addition, Iran is focussed on developments in Syria and Yemen. For India, dealing with China’s growing footprint in the Indo-Pacific and challenges in its immediate SAARC neighbourhood assume priority. Yet, there is a geographical dynamic that creates its compulsions for both countries.

A short-lived convergence

It was geography that created the 2,000 years of cultural and civilisational connect that Mr. Modi had sought to highlight during his visit last year. During the 1950-60s, differences persisted on account of the Shah’s pro-U.S. tilt, and after the 1979 revolution, it was the pro-Pakistan tilt. It was only during the late 1990s and the early years of the last decade that both countries achieved a degree of strategic convergence. India and Iran (together with Russia) cooperated in supporting the Northern Alliance in Afghanistan against the expanding role of the Pakistan-backed Taliban.

In 2003, President Mohammad Khatami was the chief guest at the Republic Day when the New Delhi Declaration was signed, flagging the role of Chabahar port in providing connectivity to Afghanistan and further into Central Asia. Then the times changed: The U.S. declared Iran as part of the ‘axis of evil’, as President Mahmoud Ahmadinejad accelerated Iran’s nuclear enrichment programme leading to progressively more sanctions, and India’s economic engagement with Iran was impacted. Simultaneously, India was pursuing its nuclear deal with the U.S. which was concluded in 2008. During this period, India’s vote against Iran in the International Atomic Energy Agency (IAEA) generated unhappiness in Tehran. This is why it has taken 15 years for another Iranian presidential visit.

With Mr. Trump, Iran’s uncertainties are increasing. The JCPOA, spearheaded by the Obama administration, eased sanctions, helping India increase its oil imports from Iran and reactivate work at Chabahar. In January, President Trump renewed the 120-day sanctions waiver but announced that this was the last time he was extending it. Therefore, when the current waiver ends on May 12, U.S. sanctions on Iran will snap back unless a new agreement is reached. This is highly unlikely.

Uncertainties of JCPOA

Speaking at a public event on February 17 in New Delhi, Mr. Rouhani declared that Iran had faithfully complied with the JCPOA (a fact certified by the IAEA), and a violation by the U.S. would be a repudiation of the sanctity of negotiated outcomes. He also warned that if it violated the JCPOA, the U.S. would “regret” it.

The JCPOA is not a bilateral deal between Iran and the U.S.; other parties are China, France, Germany, Russia, the U.K., and the EU. Further, the JCPOA was unanimously supported by the United Nations Security Council (Resolution 2231) enabling Security Council sanctions to be lifted. The problem is that the U.S. has imposed multiple and often overlapping sanctions on Iran pertaining not only to nuclear activities but also to missile testing, human rights, and terrorism. To give effect to Resolution 2231, it was obliged to lift secondary nuclear sanctions so that other countries could resume commercial activities with Iran. The threat of the U.S. snapback means that third country companies may now attract U.S. sanctions. This uncertainty has been adversely impacting the sanctions relief since Mr. Trump’s election.

The unrest that erupted in December in Mashhad and that spread to many cities in Iran claiming more than 20 lives was a reaction to rising prices amidst stories of growing corruption. Part of the reason for the economic grievances is the slower than promised sanctions relief, which would imply that Mr. Rouhani is in no position to offer any further concessions. Russia, China, and the European countries have indicated their full support for the JCPOA. However, in the absence of economic countermeasures, which is a lever that only the EU and China have, Mr. Trump is unlikely to be deterred.

Backing Mr. Trump in his anti-Iran sentiment are his allies, Israeli Prime Minister Benjamin Netanyahu and Saudi Crown Prince Mohammed bin Salman. Both blame Iran for aggressive behaviour — the former with regard to the growing influence of Iran and Hezbollah in Syria and the latter for the prolonged war in Yemen which was initiated as a quick operation in 2015 by the Crown Prince to restore President A.M. Hadi. While many European countries may also like to constrain Iran’s missile and regional activities, the fact is that the JCPOA is exclusively about restraints on Iran’s nuclear activities. According to them, only successful implementation of the JCPOA over a period of time can create the political space for additional negotiations; destroying the JCPOA is hardly the way to build upon it.

Outcomes of the visit

Meanwhile, Iran has also increased its role in Iraq, and activated links with the Taliban in Afghanistan, adding to the U.S.’s growing impatience and unhappiness. With these developments, it is hardly surprising that Mr. Modi’s characteristic ‘diplohugs’ were missing and the outcome has been modest, even compared to last year. India conveyed its support for the full and effective implementation of the JCPOA, the need for strengthening consultations on Afghanistan, and enhancing regional connectivity by building on the Chabahar. Nine MoUs were signed relating to avoidance of double taxation, visa simplification, cooperation in diverse fields including agriculture, traditional systems of medicine, health and medicine, postal cooperation, trade remedial measures, and a lease contract for an interim period of 18 months for Phase 1 of Chabahar. The last is a move forward after the inauguration of the first phase of the Chabahar port in December by Mr. Rouhani. Earlier in October, Iran had allowed a wheat shipment of 15,000 tonnes for Afghanistan through Chahbahar.

However, there has been little forward movement on the big projects that were highlighted when Mr. Modi visited Tehran last year. The negotiations on the Farzad-B gas field remain stuck, with both sides blaming the other for shifting the goalposts. Understanding on it was reached during the sanction period but remained on paper because of Iranian unhappiness over India’s stand in the IAEA. These were reopened after sanctions relief kicked in post-JCPOA when more countries showed interest.

There was talk about an aluminium smelter plant and a urea plant to build up Indian investments in the Chabahar free trade zone which in turn would catalyse port activity and justify railway connectivity out of Chabahar. The railway link has been mentioned in the context of connectivity to Afghanistan but the economic rationale for the $2 billion investment has been missing. One positive thing is the exploration of a rupee-rial arrangement which could provide an alternative channel for economic and commercial transactions in case U.S. sanctions do kick in, making dollar denominated transactions impossible. However, the sanctity of this will need to be tested before private parties on both sides begin to use it. So far, trade between the two countries has hovered around $10 billion, with two-thirds of it accounted for in terms of oil imports from Iran.

It is clear, therefore, that both countries approached the visit with modest expectations. The near-term developments in its neighbourhood are a priority for Tehran even as Mr. Modi tries to find a balance with his stated preference to develop closer ties with both the U.S. and Israel. The uncertainties surrounding the JCPOA provide the justification for adopting a ‘wait and watch’ approach.

Rakesh Sood is a former diplomat who served as Ambassador to Nepal and is currently a Distinguished Fellow at the Observer Research Foundation, Delhi

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Old friends: on India-Iran bilateral ties (20.02.18)

In purely bilateral terms, Iranian President Hassan Rouhani’s visit to Indiawas pitch perfect in content and optics. After his meeting with Prime Minister Narendra Modi, India and Iran signed agreements and memorandums of understanding on a wide variety of issues. Among the announcements was the decision to award India the contract to operate the Chabahar Shahid Beheshti port terminal after the project is completed. While no announcement was made on the Farzad-B gas field that India has expressed an interest in, the joint statement indicates that positive deliberations may follow. There were discussions on enhancing trade and investment and ease of doing business between India and Iran, including a double taxation avoidance agreement and an expert group to recommend “trade remedy measures”. Just before Mr. Rouhani’s visit, India announced it would allow Indian investment in Iran to be done in rupee terms. The concession, which has so far been extended only to Bhutan and Nepal, allows money lying in Indian banks as payment for imports from Iran, mostly oil, to be repatriated. Till now these funds have been blocked because international banks and insurance companies refuse to facilitate trade to Iran fearing further U.S. sanctions on Iranian entities. In turn, Iran is understood to have reversed last year’s decision to slash the credit period for oil payments from India, and issue more generous guidelines.

Mr. Modi and Mr. Rouhani also drew broad strokes highlighting the importance of bilateral ties between the two countries, stressing the strategic imperative for their growth. Mr. Modi called the talks “substantive and productive”, while thanking Mr. Rouhani for his leadership on regional connectivity. Mr. Rouhani endorsed India’s bid for a permanent seat at the UN Security Council with the veto, and praised India as a “living museum of religious diversity”. The joint statement issued contained tough language on the “sanctuaries for terrorism”, an issue important to both countries. But there is a broader global context to Mr. Rouhani’s visit and the red carpet rolled out by the Modi government. The visit came amid uncertainty over the U.S.’s next move on Iran, given the Trump administration’s line on the Iran nuclear deal. On the very day Mr. Modi and Mr. Rouhani met, U.S. National Security Adviser H.R. McMaster asked countries to track their investments in Iran as these might be supporting terrorism and “murder across the Middle East”. It will be important to see what, if any, implications the Indian overtures would have on India’s ties with the U.S. and its recently upgraded relations with Israel. However, it is crucial that India maintain a steady course on its strategic interests with Iran, a key source of energy, and as Mr. Modi put it, a “golden gateway” to Afghanistan and Central Asia.

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Iran-U.S. relations: On dangerous footing 16.10.17)

By refusing to certify the Iran nuclear deal, which curbed its nuclear programme in return for lifting global sanctions, U.S. President Donald Trump has put the two-year-old pact on dangerous footing. Under American law, the administration has to certify that Iran is technically in compliance with the deal that was struck between Iran and six other world powers, including the U.S., every 90 days. All other signatories, as well as the UN, insist that Iran is fully complying. But Mr. Trump, who had during his election campaign threatened to tear up the deal and as President continued to call it the “worst agreement in American diplomatic history”, disavowed it days before the next certification was due. From its early days, his administration has taken a hawkish line towards Iran, imposing new sanctions on its missile programmes and joining hands with its regional rivals in West Asia. But even as he withdrew certification, he did not scrap the deal. Instead, he passed the buck to U.S. lawmakers. The Republican-controlled Congress now has 60 days to decide whether sanctions should be reimposed. It is unlikely to do anything radical in the near term as any sweeping legislation would require bipartisan support in the Senate. Nonetheless, the damage Mr. Trump’s decision has done to the agreement and to American diplomacy in general is huge. He appears to be driven by political calculations rather than a realistic assessment of the agreement, which, by its own standards, is working.

With the withdrawal from the certification, Mr. Trump has put the final nail in the coffin of an Iran-U.S. reset that had appeared possible during the Obama days. Now the threat of sanctions will hang over the nuclear deal. This is a boon for hardliners in Iran, who have suffered a political setback in recent years. The deal became possible only because the reformists and moderates rallied behind President Hassan Rouhani’s agenda, despite strong opposition from the Iranian deep state. Even Mr. Rouhani, who promised a solution to the nuclear crisis, got the deal done and won re-election this year, will now find it difficult to mobilise public opinion behind the agreement in the light of continued U.S. hostility. The larger question is, what kind of example is the U.S. setting for the global non-proliferation regime? The Iran deal, despite its shortcomings, was a shining example of the capacity of world powers to come together and sort out a complex issue diplomatically. It assumed greater significance given the recent wars and chaos in West Asia. It should have set a model in addressing other nuclear crises. Instead, by going after Iran even though it complies with the agreement, the U.S. is damaging its own reputation.

(All of the above articles have been taken straight from The Hindu. We owe it all to them. This is just an effort to consolidate opinions expressed in The Hindu in a subject-wise manner.)