The recent interim agreement in Geneva on Iran’s nuclear programme has opened up prospects of a broader détente and hopes for peace and stability in the region. Under President Hassan Rouhani, a more pragmatic and moderate posture has been visible from Iran, and relations with the US and the West have improved.
Iran’s suffering population supports Rouhani’s efforts. However, Israel, Saudi Arabia, and hardliners in the US and Iran do not approve of the agreement.
India has been steering a cautious path, applying UN mandated sanctions but trying to apply only the minimum level of additional US and EU sanctions, keeping in view its broader economic stakes. Oil imports have been reduced in order to obtain exemptions from US sanctions as well as due to difficulties in arranging payments and insurance for shipments.
On Iran’s nuclear programme, India’s stance has been to support diplomatic resolution of outstanding nuclear issues with the International Atomic Energy Agency. While the nuclear Non-Proliferation Treaty which Iran has signed does not forbid uranium enrichment for peaceful purposes, Iran’s programme had led to doubts over its intentions.
The centrifuge capacity was not enough for civil nuclear power, was uneconomical compared with imported fuel, and the level of enrichment was much more than required for power reactors.
Give and take
Iran has agreed to to freeze its enrichment capacity, reduce and eliminate its stocks of 20 per cent enriched uranium, allow more intensive inspections, and stop work on the Arak heavy water reactor, in exchange for some relief from sanctions and a pledge not to apply more sanctions. The interim agreement gives a six-month period to reach a more comprehensive agreement.
The US Congress is the determining factor in easing general economic sanctions. A Bill on more sanctions has been passed in the House by a huge bipartisan majority (400-22), and a similar Bill in the Senate is under active consideration. Iran has much to gain from a comprehensive agreement with the P5 plus Germany. (P5 refers to the five permanent members of the UN Security Council. Along with Germany — P5+1 — they are making diplomatic efforts over Iran’s nuclear programme.)
Lifting the sanctions would provide the benefits of economic growth for its population. The regime would find it easier to manage demands for greater freedom. A civil nuclear programme could grow rapidly. Conventional arms purchases and technology transfers would greatly strengthen the country. Its dominant position in the Gulf and as the leader of Shia Muslims would be recognised.
The way forward
Iran’s retreat from the nuclear weapons threshold will strengthen the nuclear non-proliferation movement and countries that emulate Iran’s quest for nuclear weapons capability, discouraged.
Oil markets would be stabilised and boosted. Iran would be a counter to the Taliban-Al Qaeda influence in Afghanistan. Further, President Rouhani’s success could well help moderate candidates in the 2016 parliamentary elections in Iran. The US Congress is a major problem for the Obama administration in getting the sanctions lifted. There is deep suspicion over Iran’s intentions, rightwing hostility, and bitter division over domestic issues such as healthcare and government spending.
The approaching 2014 congressional election has also cast its shadow. Obama needs to be encouraged to go further by the international community. It is hoped that Iran’s leaders will also realise the importance of gaining support from the US Congress.
For India, it is time to reinvigorate the bilateral agenda with Iran. Oil and gas purchases can be increased, while participation in the upstream and downstream activities in the hydrocarbon sector can be pursued. The Chabahar port and transportation corridors to Central Asia and Afghanistan are of strategic importance, and shortsighted considerations of returns on investment should not hold up participation.
Iran is a big consumer of India’s educational, medical, IT and consultancy services; such services exports could help redress the balance of payments with Iran. Iranian FDI in India should be promoted— this too will help the balance of payments. An imaginative and proactive approach is called for.
(The author is a former ambassador of India.)