Round The World

New Delhi, 22 May 2012

Messy Iran Factor

WALKING STRATEGIC AUTONOMY TIGHTROPE

By Monish Tourangbam

Research Scholar, School of International Studies (JNU)

Indian policy makers increasingly use the concept of “strategic autonomy” to navigate foreign policy and nothing seems to complicate this quest more than India’s relations with Iran presently. Even as United Arab Emirates’ (UAE) Foreign Minister Sheikh Abdullah Bin Zayed Al Nahyan engaged with his Indian counterpart to find ways of increasing economic ties, especially in the energy sector during his recent visit, the Iranian puzzle continued to stalk meetings. 

The media went to town about decreasing oil import from Iran with many accusing the UPA Government of buckling under US pressure.  Notwithstanding this, New Delhi continues efforts to increase energy commerce with other Persian Gulf region’s major oil producers including all-important UAE. A part of India’s strategy to diversify its energy procurement sources to meet the increasing demands of its economy.

Indeed, New Delhi’s relationship with the UAE has to be seen in the larger context of its policy towards Gulf monarchies which are also members of the Gulf Cooperation Council (GCC). Wherein India’s economic liberalisation and sustained growth provided a major energy market for Gulf oil and gas rich countries and economic investments in GCC states provided a fertile ground for a huge number of Indian expatriate workers to earn for themselves and their family back home.

Importantly, India is not only the largest recipient country in terms of both global and GCC remittances, accounting for roughly 50 per cent of money transferred from the Gulf.  But also its energy demand continues to rise despite a slowing global economy with a majority of Indian crude oil imports coming from the Middle East. Natural gas demand is expected to grow considerably, largely driven by demand in the power sector.

Moreover, New Delhi is seeking additional volumes of oil and natural gas from the Gulf suppliers. Already Saudi Arabia and UAE are planning to increase their supply of crude oil to major Indian refineries and this demand for supplies has increased further as sanctions against Iran become more stringent.

Towards that end, India and the UAE decided to set up a high-level joint task force to explore investment opportunities, including in the energy sector to boost bilateral trade. For UAE, India is the largest trading partner and being one of the major oil exporters to India it is willing to increase supplies. Besides, nearly 6 million Indians live and work in the Gulf region, of which 1.75 million are in UAE alone.

However, despite India’s increasing convergences with Gulf monarchies, the importance of Iran as a major power player in the Middle East hardly needs underscoring. Undeniably, New Delhi cannot afford losing Tehran for any other relationship.

According to sources, India has decided to cut crude oil import from Iran by over 11 per cent in 2012-13 to 15.5 million tons. Are these cuts tell-tale signs of an increasing gap between India and Iran? Has Indian foreign policy lost its “strategic autonomy”? Is New Delhi kowtowing to increasing American pressure to cut ties with the Iranians?  

Official commentators in New Delhi take pains to explain the recent cut in Iranian oil imports is due to commercial and technical considerations, and not a result of American pressure. Doubtlessly, rising US-led pressure and sanctions on Iranian commercial entities have proved a stumbling block and made it increasingly difficult to clear outstanding payments. Add to this, threat of US reprisals and sanctions are proving a dampener for various Indian private corporate players in the oil sector.

In this scenario, it is fair to surmise there are complexities which are by-products of American pressure. Whereby, the continuing debate and timing of cuts has raised the decibel levels of carpers of Indo-US relations in Washington and New Delhi.  Not a few see an American design to curtail India’s foreign policy independence.

True, India is not in favour of Iran acquiring nuclear weapons but at the same time it differs with the US on the use of sanctions policy to resolve this issue. Pertinently, New Delhi is not alone on this issue.  Till date, Washington has not succeeded in getting China on board. Beijing not only shares deep economic ties with the US but at the same time continues to engage in massive energy procurement from Iran.  

Add to this, the US Administration’s murky record when it comes to securing its own energy needs has strengthened critical voices. For instance, old-age US rhetoric of democracy promotion and rule of law goes through the roof when they intend to safeguard their own oil reserves.

Beside oil, India relies on Iran for land access to Afghanistan and Central Asia denied to it by Pakistan. Ideally, no bilateral relationship should be made a litmus test for the continuation of another. But India’s and Iran’s respective relations with the US serve as a potent hindrance to India-Iran ties. 

India-Iran ties have come under serious strain as a result of New Delhi’s increasing engagements with Washington along-with international suspicions over Iran’s nuclear programme. In fact, this is seen as a litmus test for India’s independent foreign policy-making.

Clearly, India has to walk a diplomatic tightrope, confronting strategic storms. Prime Minister Manmohan Singh has been under increasing domestic pressure to stay clear of any American pressure to direct Indian foreign policy and its policy towards Iran is often pitched as the yardstick to sustain independence of our foreign policy decision-making.

Thus, to what extent can the idea of strategic autonomy help fashion foreign policy? Is maintaining very strict autonomy practically feasible in this highly interwoven global system? How does India maintain a balance among the many diverse needs of its foreign policy that at many times conflict each other?

Undoubtedly, the international system today belongs neither to strict alliances nor to harsh non-alignment but to one of multiple-engagements. New Delhi has been doing a tight balancing act when it comes to engaging Iran and US, both indispensable in India’s growth as a major global power.

Arguably, as Iran and the US-led Western alliance fail to find common ground, coupled with rising sanctions and threats of reprisals against Iran, can New Delhi continue to follow a middle path, without falling into someone’s lap, and end up annoying another?

Certainly, one cannot deny this scenario but one needs to highlight that neither Iran nor US can be ignored. India needs to elevate its strategic partnership with the US if it aspires to be a global power, but simultaneously find maneuvering space to sustain its ties with Iran. At least, for its energy security sake and regional strategy. ---- INFA

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