Relevance: GS Paper II (International Relations)
Washington has exempted India and seven other countries from the sanctions on oil imports from Iran.
Will exemption/waiver solve India’s problems?
- For India, the impact of the American sanctions plan would be manifold, regardless of the waiver.
- There is the shock that sanctions would deal to the oil import bill, given that Iran is India’s third largest supplier. There are not only rising costs of oil to contend with, but also the added cost of having to recalibrate Indian fuel refineries that are used to process Iran’s special crude.
- There would be impact would be on India’s investment in the Chabahar port, which would face both direct and indirect sanctions: as shippers, port suppliers and trading companies refuse to participate in the project.
- There would be the impact on India’s regional security situation, which could see the Iranian-Arab divide deepen, Afghanistan’s choices dwindle and an angry Iran pitched closer into the China-Russia corner.
- The U.S. has said that it is only issuing temporary waivers, and the waivers are strictly linked to the condition that countries receiving them keep cutting down their purchases from Iran.
- Along with the nuclear deal sanction, India continues to face sanctions linked to the Countering America’s Adversaries Through Sanctions Act, which puts more strictures on dealings with Iran, Russia and North Korea.
- With trade levels receding, the Iranian regime may well lose interest in the Chabahar option, and focus on its main port of Bandar Abbas instead, derailing India’s grander plans for regional connectivity.
- There is also the worry that all of India’s sacrifices may come to naught, as US may well use the pressure placed on Iran to his own advantage, and possibly open talks with Tehran at a later date.
If the U.S. presses on with sanctions, it would be a marked failure of Indian diplomacy. And if the waiver does come through, as is indicated, it will be no victory, but signify an abject submission to the sanctions themselves. With no gains in the offing from a policy of ‘pragmatism’, India may have been better off sticking to principle instead.