March 18, 2012

When Friends Become Pushy: India, Iran and America’s Zero Sum Game

In 2008, Prime Minister Manmohan Singh’s government risked its very survival to get the Indo-US nuclear deal ratified by the Indian parliament. The coalition government had came under existential threat when a group of left-wing parties, supporting the coalition from outside, threatened to pull out of the Congress-led government if the Prime Minister  did not heed to its demand of making a U-turn on the deal. In almost a show of missionary zeal, Singh let go of these parties and stuck a makeshift agreement with the Samajwadi Party to save the day and got the deal ratified. Singh, it was reported, had even threatened to quit, if the deal was not allowed to meet its logical end. When asked later why he gambled so much to get the deal signed Singh replied, “when I became convinced the deal can be achieved and was in people’s interest, I supported it.”

The argument that ‘convinced’ Singh’s was many fronts – India has been on a brink of a energy crisis for a few years and nuclear energy will help it. It was also deemed cheaper than hydrocarbon-based electricity generation and its only environmental impact is the problem with its disposal. Not that its advantages ended there, a deal with the world’s sole superpower was India’s highway to the big boys club. Once US nods, everyone else will follow and they did. Other major superpowers, including France, Japan and Russia offered to build nuclear plants in India. Australia, a country that had until now refused to sell uranium to India has now amended its position, even after facing very stiff resistance for amending its traditional stance of not selling uranium to any country that has not signed the nuclear non-proliferation (NPT) treaty. Australian PM Julia Gillard made a very public pitch for the sale of Australian uranium to India citing India’s “exceptional” non-proliferation record.

In other words, and as has been said before, the symbolic purpose of deal going through goes way beyond just buying and selling of uranium, or for that matter setting up of nuclear plants. In essence, it brought down many barriers that had hitherto constrained India’s relationship with the West and more so after it successfully tested its own nuclear bomb in 1998. So far so good.

It cannot, however, be discounted that India signed the deal with an America that was desperately in need of new partners; the George W Bush administration had alienated many, even some of  its traditional allies, since its Iraq adventure. Moreover, to the American foreign policy elite any country that can help ‘contain’ belligerent or non-confirmatory regimes (read China) is a friendship worth cultivation. India just happened to fit the bill right. Arguments of being non-signatory to the NPT were tactfully ignored.

The Indian foreign policy elite sensed an opportunity too. They saw in the nuclear deal a now-or-never opportunity. It was felt that President Bush’s right-wing, aggressive, ‘only me’ foreign policy stance will work in India’s favour. In him, Indian foreign policy intellectuals saw an administration that was not only willing to ignore a lot of things that had until then worked against India’s ambition to end its nuclear isolation but, they realised, that the administration was willing to do much more than that. It was ready to walk that extra mile to help India pull itself out of the throws of international isolation. The result was a deal that killed many birds in one shot and was hailed as win-win by leaders of both the countries.

Things, however, have drastically changed since Bush left the White House. The honeymoon period of the Indo-US warmth, many have concluded, is over and the ground realities have now come to surface. In signing the nuclear deal both countries looked for their own interests – India to end its nuclear isolation and access to energy security and US a reliable partner in Asia, a booming economy that was to be a potential market at a time of great economic distress at home. The paradox now, however, is that the same deal is now increasingly looking like a bane for both countries and more so for India than the US.

One of the reasons why India was offered the nuclear deal in the first place was the Bush administration’s eagerness to find reliable partners when their availability was in short supply. It was therefore willing to offer much more than it would have, to another country in a normal scenario. There was another, many would argue and it was the administration’s short-sighted and narrow view of America’s national interest. Both, however, worked in favour of a country that had virtually no record of active belligerence against the West.

But things started to change by the time the current president took office. Barak Obama’s attitude towards India has been described as “cold” at best and “lack of it” at worst. In fact, some, early on in his presidency even argued that he was undoing all the good that his predecessor had gone with regards to its relationship with India. While Bush was disliked not only in places like Pakistan or Iraq but also in his home country, he attained a fair degree of popularity in India. This was not only because of the nuclear deal but also for siding with India vis-a-vis Pakistan. His popularity among the members of the ruling Congress party can be gauged from the fact that in 2009 the party spokesperson Abhishek Manu Singhvi made the audacious demand of a Bharat Ratna, India’s highest civilian honour, for Bush. Earlier, Singh is reported to have told Bush in a meeting that the “people of India” love him, a claim particularly denounced by the left parties.

Smart Power

When Suzanne Nossel first articulated the idea of a ‘smart power’ in her 2004 article in the Foreign Affairs journal, hardly would she have imagined that America would see its closest personification in less than five years’ time. Nossel argues that being a Smart Power is not an euphemism for a weak left-leaning foreign policy but:

liberal internationalism, which posits that a global system of stable liberal democracies would be less prone to war. Washington, the theory goes, should thus offer assertive leadership — diplomatic, economic, and not least, military — to advance a broad array of goals: self-determination, human rights, free trade, the rule of law, economic development, and the quarantine and elimination of dictators and weapons of mass destruction (WMD).

She further critics:

Unlike conservatives, who rely on military power as the main tool of statecraft, liberal internationalists see trade, diplomacy, foreign aid, and the spread of American values as equally important…But the militant imperiousness of the Bush administration is fundamentally inconsistent with the ideals they claim to invoke. To reinvent liberal internationalism for the twenty-first century, progressives must wrest it back from Republican policymakers who have misapplied it.

It is this liberal internationalism that is compelling Obama to pursue a policy markedly distinct from that of Bush’s. The zeal to “wrest it back from Republican policymakers” has made the Indo-US relation its casualty up to some extent. Obama’s 2009 India visit was high on rhetoric and clap arousing speeches but it hardly achieved anything on ground. Moreover, Obama’s populist stand on trade and outsourcing had made Indian companies doing business in the US jittery. For them, while Bush, hated worldwide, brought India greater recognition in the international sphere, Obama is yet to contribute something even remotely substantial in nature as the nuclear deal. The current president’s judicious use of America’s strengths in technology, defense and trade to extract its own interest has made its foreign policy more business-like. By the virtue of its economic and geopolitical significance, India has made itself indispensable to America’s interests in the region and beyond and Obama administration recognises that. But it has skillfully refrained from giving India any more attention than the latter can successfully demonstrate to need. This change in attitude means that the era of preferential treatment for India is over and it will be meted out with the same treatment as everyone else. In other words, what India gets will be proportional to what India can contribute to America in achieving its own interests. This is  in contrast to the approach adopted by Bush administration, that doled out more to nations that it viewed as sharing common values and interests.

The ‘cooling down’ of relations between the two countries has been accompanied with increasing clashes in multi-national forums, including but not limited to the UN. India has repeatedly found itself on the other side of the argument when voting for or against resolutions promoted or sponsored by the US. During voting for Resolution 1973, pertaining to establishment of a no-fly zone over Libya, India abstained. During the voting for the Arab League sponsored resolution on Syria, India criticised the US and West for trying a repeat of Libya in Syria in garb of a humanitarian intervention with the Responsibility to Protect (R2P) argument.

Singh’s government is itself in a middle of an array of protests directed against it over the issue of building new nuclear plants in Maharashtra and Tamil Nadu. Flagging the consequences of the Fukushima Nuclear power plant disaster, activists are up in arms against what they see as a selloff of the safety concerns of the citizens and fishermen living near the plant for supplying energy to urban metropolis and heavy industries. Similar concerns had lead to protests that rocked the site of the Jaitapur nuclear power plant last year.

Moreover, opinion is now equally divided to questions of India’s net-gains from the nuclear deal. Kiran Karnik, former head of one of India’s main business lobby, contends, “in effect, it was a trade-off between strategic autonomy – even sovereignty – on the one hand, and the need to quickly step up power generation (specifically, nuclear power generation).” And he may be right. But Karnik’s article also points to a more crucial aspect of the effects this deal had on India’s “strategic space”. Among other things he’s pointing to the US’ constant nudging of India on the Iranian issue.

The Zero Sum Game

In February, Secretary of State Hilary Clinton, while addressing a senate panel admitted for the first time that it was pressuring countries like India, Turkey and China to stop its crude imports in order for the US sponsored sanctions to work. She added that the US was “implementing the new Iran sanctions aggressively”  and that the administration has set up a team to assist countries like India, that depend heavily on Iranian oil, to diversify their imports and finally cull imports from Iran.

Pressure tactics like these is nothing new in the US-India relationship. In 2005, it emerged later, just before a crucial vote against Iran’s nuclear programme in the IAEA, the US had “coerced” India to vote against Iran when the latter was of the view that further scrutiny was required before IAEA could refer the case to the UN Security Council. This came after reports that the then Secretary of State Condoleezza Rice had told the Indian external affairs minister Natwar Singh that progress on the Nuclear Deal will depend on India’s cooperation with the US’ in its efforts to tighten the screws on Iran’s nuclear programme. The vote stunned many in India as well in Iran.

Revelations apart, India’s vote against Iran in that year underlined for the first time how US succeeded in bring about a major shift in the tenants of Indian foreign policy. Iran has deep historical relations with India that survived the 1979 Islamic Revolution (although the nature of the relationship changed). Not only does the relationship reflects Indian policy sensitivity towards of the its Shia population, but also a respect for Iran’s continued support in multi-national forums on the issue of Kashmir, where it has consistently supported India’s stand and has helped ward off anti-India resolutions from Pakistan. It remains, along with Iraq under Saddam Hussain, India’s few reliable friends in the Islamic world.

Iran’s importance is aggrandised while viewing Asia’s geo-political map from New Delhi’s prism. Not only does India have a sizable Shia population, the country has counted on Iran also for its tactical security and not just energy security. It is noteworthy then that Iran supported the Northern Alliance in Afghanistan, just like India. Its own complex relationship with a Sunni-majority, US-aligned Pakistan means that it’s often at loggerheads on many issues with that country.  While China (India’s worry on its eastern front) is building a port in Pakistan, Iran wants India to develop one in its territory. The proposed new port will come in Chabahar, a city in south-east Iran and only 72-km from the Gwadar port, one that China is developing for Pakistan. Chabahar is proposed to be complimented by a railway line up to mineral rich province of Bamiyan in Afghanistan, which is reported to have Afghanistan’s largest iron ore deposits. The port holds significance not only for the supply of raw material to Indian but also in view of shrinking the  in strategic space for Pakistan in relation to Afghanistan. Afghanistan being a landlocked country is dependent on Pakistan for shipping of goods from its ports into Afghanistan. A recent blockade of this route by Pakistan, after several of its soldiers were killed by NATO bombing, proved to be an effective means of showing anger against the unprovoked killings by NATO aircrafts. In plain terms, the new railway line and port will reduce Pakistan’s strategic importance in the region and hence its leverage to extract aid from the US, even though the latter is unlikely to use an Iranian rote to Afghanistan. More importantly it will give India a direct route to Afghanistan and may profoundly affect equation in South Asia.

The Proposed Railroad from Hajigak in Afghanistan to Chabahar Port in Iran

Now bring US into the equation. It wants India to sever all its economic ties with Iran, just because it said so. A new US law – Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA) – threatens any country that deals with the Iranian Central Bank with sanction. What this means for India is that it should stop buying from Iran, especially its crude oil because ‘such money may be used by Iran to finance its nuclear programme.’ As things stand today, the US’ ultimatum is not a choice but rather an order which must eventually be applied so that unilateral US and European sanctions against Iran may work.

India’s foreign policy response so far can best be described as evasive. It has refused to apply unilateral American and European sanctions and insists that it will only go by the UN-approved sanctions vis-à-vis Resolution 1929. Up until now it has not stopped the import of oil from Iran and has been looking at other option to route payments (paying through Turkey is one option but that route may also be blocked in the future).Anticipating that that route might be closed soon as well, it is now crafting a new system of trading where by India may pay half in its own currency so that Iran can buy Indian goods.

It will be interesting to see for how long will India be able to sustain the tremendous pressure coming from Washington, and if it will finally buckle down. Although Indian diplomats have refrained from taking a defiant stance, it’s clear that the whole new relationship is now starting to look more and more like a Zero Sum Game from New Delhi’s prospective. A now increasingly looking bad nuclear deal is forcing us to abandon an age old friend, a reliable energy supplier and in many senses a sole ally from that region for a country that has a history of belligerence towards India – Pakistan. Iran is satiating India’s growing need for energy at a cost lower than other oil exporting countries can provide. If Saudi Arabia eventually compensates India for the loss of Iranian oil, its detrimental effect will be instantly seen in the prices of oil and gas inside the country. And all this will only help China to fill in the power void in Iran.

India’s Diplomatic Challenge and Conclusion

The biggest challenge India’s diplomacy faces in today’s scenario is how it can pull out its relationship with either without invoking the ire of the other. It has passed the era where it could sit in the corner and tell the belligerents that it has nothing to do with their fight. The recent bombing of the Israeli diplomat’s vehicle signifies that India now stand at a crossroad of its relationship with the outside world and its choices, in so far as its diplomatic space is concerned, are shrinking.

It success will depend on the extent to which it is able to secure its interest with both US and Iran without attracting accusation of betrayal from either side. It needs to channelise its lobbying better to appraise the US administration of Iran’s important but complex place in the region. In all honesty it must persuade the US to see Iran as a complex case caution it against adopting a monolithic approach. It should use its influence in American think-tanks and caucuses to help US develop a strategy that does not harm India’s interest vis-a-vis Iran.

Fortunately, there are increasing signs of that changing approach already. Obama’s warning against making ‘loose talk’ about a war with Iran is a step in the right direction. But that also means that US will rely more on sanctions to tame Iran and for that to work India needs to be on board. But India should not hesitate in making its compulsions and geostrategic interests known to the Americans and they should not impinge on it. All this needs a carefully devised nuanced policy that achieves as much as it can in such hostile environment with collateral damage. India could start by convincing the Obama administration that this is how a Smart Power really ought to work.


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