Iran-US Balancing Act for India: Should We Send a Special Envoy?

Which side should India take? Iran’s or the US’s? Neutrality is fine, but a benign role won’t augur well for India.

Image used for representational purposes.

(Photo: Erum Gour / The Quint)

• Trump will be advised quite clearly by his military advisers that a war with Iran is not winnable in the conventional domain.
• India is one of the countries most impacted by the Iran-US tussle. Our energy, financial and humanitarian considerations are huge.
• India needs to remain prepared with an alternative crude supply plan to cushion any potential disruption from the Middle East.
• Which side should India take? Iran’s or the US’? Neutrality is fine, but a benign role does not augur well for India’s diplomatic aspirations.

So, is President Trump’s speech on Wednesday night a stand down to all threats to peace and stability in West Asia? The first week of 2020 triggered a major risk to West Asia, giving rise among many to the spectre of even an impending world war. Qassem Soleimani’s assassination, the — what is being seen as ‘measured’ — Iranian response, and the subsequent virtual but temporary stand down by the US, were all in the realm of the culmination of the larger spiral triggered by the attack on the Saudi Aramco oil facility on 14 September 2019.

Trump’s ‘Iran Card’ May Not Work in the US Elections

The strategic environment of West Asia is just too complex for such simplistic deductions such as the return of stability to its dynamic politics. It all impacts India’s interests hugely, but the factors at play are many. First, President Trump’s basic Iran policy is all about regime change and neutralisation, or putting a stop to the nuclear program. Neither has been achieved, and diplomacy will take this nowhere.

Trump will be advised quite clearly by his military advisers that a war with Iran is not winnable in the conventional domain; scope for proxy war does not exist, and the world is unlikely to support Trump’s coercive ways against Iran after he pulled out of the Joint Comprehensive Plan of Action (JCPOA) of July 2015.

Put together, Trump’s scope of making this work for his electoral prospects appears bleak. 

However, that won’t stop him and West Asia will surely see more tension in the near future. As for Iran, the leadership cannot take for granted that its position has been in any way secured by its recent action.

The economic situation remains bleak, and its continued display of intent to nuclearise, will not buy it too many friends. It clearly overstepped when it targeted the Aramco oil facility in Saudi Arabia. Its risk-taking propensity will definitely reduce, but not cease altogether. In many ways, Iran is in more of a bind than Trump. It has to cater to China, Russia, Japan and India which are not in favour of revving this beyond the point it already reached in the first week of 2020.

How India Should Gear Up For Fallout

As mentioned, India is one of the countries most impacted. Our energy, financial and humanitarian considerations are huge. On the energy front, 50 percent of our oil requirement comes from the Persian Gulf area. Prices have not risen to the extent they could. Every USD 10 a barrel rise in crude oil prices expands India's current account deficit (CAD) by 0.4 percent of the GDP. Every 10 percent increase in crude oil prices can push up the inflation rate by 20 basis points. Every dollar increase in crude prices will increase India's annual oil import bill by over USD 1.6 billion.

In better times, India could absorb this with a racing economy. With the downturn in recent times, increase in energy cost will be one of the major contributory causes for higher inflation.

Besides, this will lead to an increase in the cost of flights due to the rerouting over the Gulf air space, which will add to the Indian aviation industry which has a very large number of flights from India to the Gulf region and back.

Cost of transportation and insurance is also likely to rise. India needs to remain prepared with an alternative crude supply plan to cushion any potential disruption from the Middle East. It is already speeding up plans to more than double its strategic petroleum reserve capacity, to cushion the impact of any potential disruption to oil flows in case geopolitical tensions escalate — but this will obviously take time to implement.

A ‘Benign Role’ Won’t Help India’s Diplomacy

Iran subtly let it be known, and it was carried by some news agencies, that it could be forced to strike any of the US military bases in West Asia, including the UAE and Kuwait, where 7,000 and 13,000 US servicemen respectively are billeted. Alarm bells would have sounded in many parts of the world, and expectedly in India too, because the hybrid wars of West Asia have all been limited to Lebanon, Syria, Iraq, parts of Saudi Arabia and Yemen. The Gulf zone of the ‘sheikhdoms’, UAE, Kuwait, Bahrain, Qatar, Oman, and remaining Saudi Arabia, have all thrived in the environment of relative stability, presenting great business opportunities to the West and other richer countries.

India has a large diaspora there, and remittances calculated to be nearly USD 40 billion are made from it.

Confidence gets diluted in such a situation, and many may even be expected to return in haste, preferring the peace of their hometowns rather than a fast buck in risky conditions abroad. With proxies under relatively lower degree of control after the lifting of Soleimani’s strong presence, a rogue proxy action in a Gulf state could always remain a possibility. Thus, any potential of the turbulence afflicting the Gulf Cooperation Council (GCC) countries is going to make it much worse for India.

As much is the issue of choice between supporting Iran or the US. Neutrality is fine, but a benign role does not augur well for India’s aspirations for the higher table of diplomacy. It has to be more of an actively ‘involved neutrality’.

India Must Remain Terror-Alert; Could Consider Appointing a Special Envoy

Prime Minister Modi has achieved much in his tenure in foreign policy terms, involving both the US and West Asia. India’s relationship with the Gulf states could not be better than it is currently. It cannot be squandered.

Perhaps the appointment of a Special Envoy to West Asia will unburden the External Affairs Minister and yet, display a more involved intent.

The Special Envoy can make visits to the important capitals of West Asia, Europe and Washington and be much more visible. In addition there is no need to be perturbed by US consultation on Iran with Pakistan or China and not New Delhi. Hyphenation is the last thing we need. The US has many dots to join in its foreign policy and at the appropriate moment it will take India on board fully appreciating the stakes that exist for us in West Asia.

The world will probably see a period of suspicious quiet in West Asia for a short time before things return to some of tension again.

The strange but tragic air crash of a Ukrainian airliner near Tehran — with mostly Iranian and Canadian passengers and no Americans — may cause some issues which cannot yet be discerned or predicted. Lastly, someone will hopefully have surveillance over the Islamic State (ISIS). Diversion of attention will only help it attempt to recover. India must remain alert on this because the manifestation of terrorist acts away from the main centre of presence, does take place to signal that a high-profile group under international pressure is not yet down and out.

(The writer, a former GOC of the Army’s 15 Corps, is now the Chancellor of Kashmir University. He can be reached at @atahasnain53. This is an opinion piece and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)