GS2 (Mains Answer Writing): US - Iran Nuclear Pact Controversy | UPSC Mains: International Relations PDF Download

In what ways would the ongoing US-Iran Nuclear Pact Controversy affect the national interest of India? How should India respond to its situation?

Donald Trump has withdrawn from the Iran nuclear deal calling it a “disaster” and “one-sided.” The deal was signed between P5+1 (US, the UK, Iran, China, France, Russia, Germany and the European Union) and Iran. Commonly known as Joint Comprehensive Plan of Action (JCPOA), under the deal, Iran was to eliminate stockpiles of enriched uranium in return of lifting nuclear-related economic sanctions. 

• Trump also announced the re-imposition of sanctions. Other signatories are not with the US in this pull-out and continue to support the deal. Exiting the deal was part of Trump’s campaign pledge.  Implications for India: Undeniably, India’s relation with Iran is less crucial than its relations with the USA. But for India, Iran is significant because of India’s energy interests, and connectivity to Afghanistan and Central Asia. Both could be affected by the Trump administration’s withdrawal from the JCPOA. 
• Oil prices: India may continue to import Iran’s oil but the impact on world oil prices will be the immediately visible impact of the U.S. decision. Iran is presently India’s third biggest supplier (after Iraq and Saudi Arabia), and any increase in prices will hit both inflation levels as well as the Indian rupee. Both countries have instituted several measures in the past few months, including allowing Indian investment in rupees, and initiating new banking channels, between them. 
• Regional connectivity: The relationship between the two goes beyond energy. India has committed more than $500 million to develop Chabahar port, which gives New Delhi access to Afghanistan, bypassing Pakistan. Dozens of pacts on trade, regional connectivity and investment were signed during Rouhani’s India visit in February. 
• US-India ties: For India, it will also add another difficult item to the U.S.-India agenda. Dialogues on it will require India to expend time and resources that are already in short supply. Thus, while the US decision may have implications on India’s foreign policy, trade relations are unlikely to be impacted. Indian response: India has long been a proponent of a “rules-based order” that depends on multilateral consensus and an adherence to commitments made by countries on the international stage. 
• By walking out of the JCPOA, the U.S. government has overturned the precept that such international agreements are made by “States” not just with prevailing governments or regimes. This could also impact all agreements India is negotiating both bilaterally and multilaterally with the U.S., and the government will have to choose its future course factoring in the new U.S. behaviour. India should engage in private discussion with the U.S. counterparts and other stakeholders to resolve the issue peacefully through dialogue and diplomacy by respecting Iran’s right to peaceful uses of nuclear energy international community’s strong interest in exclusively peaceful nature of Iran’s nuclear programme.

Topics Covered - India Iran Relations, P5, NPT