During a visit to India in the last week of June, Nicky Haley, the U.S. ambassador to the UN and a close confidant of President Trump, warned New Delhi that unless it drastically reduced its energy imports from Iran by November 4, it would be subject to American sanctions. While reportedly talking tough privately with Prime Minister Modi regarding India’s oil and gas imports from Iran, she was more circumspect—yet firm—in public. In an interview to an Indian TV channel she declared “I think for the future of India, future of resources, we would encourage them to rethink their relationship with Iran.” Tehran, Haley said, “is the hidden . . . force behind most of the conflict in the region.” Following the American withdrawal from the Iran nuclear deal and the re-imposition of sanctions on Tehran, India had made it clear that it is willing to abide by sanctions imposed by the UN but will not implement sanctions imposed by a single country. As if to reinforce the message of America’s displeasure with India’s policy toward Iran, Washington abruptly canceled the high-level 2+2 meeting of the two countries’ defense and foreign ministers. That meeting had been scheduled to be held in Washington in early July and was canceled by America without giving any concrete reason for it thus irking India. However, Indian relations with the United States have deepened to an extent where the Indian government cannot openly express its displeasure at Washington’s unilateral actions.
Not only is the United States the leading destination for Indian exports—15.6 percent of Indian exports in 2017 went to the United States—its security relationship with Washington has grown by leaps and bounds during the past decade. Much of the latter is a function of China’s rise which both Washington and New Delhi find threatening to different degrees. Indian suspicion of China’s designs in its neighborhood, especially Beijing’s cultivation of strategic relations with Myanmar, Sri Lanka, and the Maldives is a catalyst for renewed Indian misgivings. Furthermore, China’s increasingly intimate economic and political ties with India’s nemesis, Pakistan, have been perennial points of contention between the two countries. China’s massive financial commitment of $500 million in grants to build the Gwadar port facilities in Baluchistan is seen in India as part of Beijing’s strategy to extend its reach into the Persian Gulf. This also a problem for New Delhi because it also bolsters Pakistan’s capacity to confront India in the future.
The United States maintains civil nuclear cooperation with India, despite New Delhi’s refusal to sign the Nuclear Non-Proliferation Treaty. In addition, America has offered to sell India unarmed Guardian surveillance drones, aircraft carrier technologies, and F-18 and F-16 fighter aircraft to bolster its defense capabilities and level the playing field with China. However, increasing security dependence on Washington has forced India into a quandary when it comes to its relations with Iran, which America has defined as its primary antagonist. The American withdrawal from the Iran Deal, the reimposition of sanctions on Iran, and its threat to sanction other countries that continue to have economic relations with Tehran beyond November 4 have further exacerbated India’s predicament.
India’s relations with Iran have been nurtured with care by New Delhi for the past several decades. Even during the Shah’s reign when Iran and Pakistan were close allies, India made every attempt not to tread on Iranian toes. When the Shah expressed apprehension after India’s liberation of Bangladesh in 1971 that it might try to dismember the rump Pakistan, Prime Minister Indira Gandhi sent a high-level personal emissary to Tehran to set his fears at rest. While there was some unease in New Delhi as a result of the Islamic thrust of the Iranian revolution of 1979, it was quickly overcome as India discovered the value of a neighbor and former ally of Pakistan that no longer trusted the Pakistani leadership because of the latter’s close relations with the United States.
India’s need for oil and gas imports from Iran provides only a partial explanation of New Delhi’s desire to preserve good relations with that country. Iran is the third largest source of oil imports for India behind Saudi Arabia and Iraq and a significant supplier of natural gas. But India’s interest in cultivating Iran goes beyond its need for imported energy. In the final analysis, India can find alternative sources for oil and gas imports as there is no shortage of suppliers.
It is Iran’s geostrategic location that makes the country very important for India. Iran is a major land power contiguous to Pakistan and Afghanistan. It is in India’s interest to cultivate Iran so that in times of crisis with Pakistan the latter is unable to draw on Iran to provide defense in depth. Simultaneously, Iran is crucial to India as the gateway to Afghanistan and Central Asia for commercial and strategic reasons.
India is cut off from direct access to these countries because of its uneasy relations with Pakistan. India is interested in nurturing a friendly government in Afghanistan to prevent Pakistan from using it as a rear base in times of conflict with India. It does not want a repetition of the 1990s when the Pakistan-supported Taliban were in power in Kabul. Both India and Iran, for different reasons, provided aid to the Northern Alliance in its fight against the Taliban and continue to have a major interest in not allowing the Taliban to return to power in Afghanistan.
Moreover, Iran’s Chahbahar Port in southeastern Iran provides India an ideal point of entry not only into Iran but also to Afghanistan and Central Asia that bypasses Pakistan. It is no wonder, therefore, that New Delhi has committed significant resources in building the Chahbahar Port, which was inaugurated in December 2017 with India expected to take over operations when a final deal is signed with Iran. Once in operation, it would provide an excellent transit point for Indian goods bound for other parts of Iran and for Afghanistan and the countries of Central Asia.
The American threat to sanction India if it continues to develop relations with Iran, therefore, comes at a most inopportune time for New Delhi. The Trump administration has turned the U.S.-Iran relationship into a zero-sum game and given the call that “you are either with us or against us.” America’s decision has narrowed the diplomatic maneuvering-room for countries like India. Whether New Dehli caves in or decides to defy American pressure is anybody’s guess. No matter what the decision, it will be a very painful one for New Delhi. However, forcing India into making such a choice could also boomerang on the United States. For if India decides to defy Washington on Iran, it could detract immeasurably from America’s credibility as the lone superpower.