A Persian Puzzle

The following post originally made an appearance here.

In the past week, India announced two major policy decisions – the first was to continue trade (in rupees and gold instead of dollars) with the Islamic Republic of Iran despite European and American sanctions, and the second was to award the $20-billion contract for Multi-role Medium Range Combat Aircraft (MMRCA), the world’s largest such open tender aviation deal to date, to the French company Dassault for its Rafale fighter jet.

Both these decisions have been received with much dismay among India watchers. In an article titled, “India to US: Not too close!”  at The American Interest blog, Walter Russell Mead is a explains, “Its European allies drove the US crazy during the Cold War; new Asian friends and allies will be no easier to work with in the Pacific era now under way. India wants to be a superpower in its own right rather than a character actor in an American John Wayne movie.” Sadanand Dhume, fellow at the American Enterprise Institute, argues in the Wall Street Journal (Weaning India Off Iran) that the Indian government has been stupendously shortsighted in its dealings with Iran and the United States. Although US officials may be willing to “give India a pass” when she purchases Rafales over American jets, or even when the Indian parliament passes a nuclear civil liability bill that effectively shuts out US firms, Iran’s nuclear programme is seen across party lines as a critical security threat to US interests and is not an “issue where friends can agree to disagree.”

There is much merit in this point of view – after all, if India is concerned about Chinese ambitions in the neighbourhood, there is no better security than to be associated, even loosely, with a US-led fraternity of nations aimed at containing China. Despite weaponising its latent nuclear force in 1998 and developing (nuclear-capable) missiles that have brought all of China but Manchuria within range, India stands significantly behind her larger northeastern neighbour in military capabilities. Furthermore, a US vote is critical if India wishes to realise her ambition of becoming a permanent member of the United Nations Security Council.

With trade between India and the United States standing at around $45 billion, the figure is a far more significant portion of India’s GDP than it is the United States’ – the United States is India’s third-largest trading partner whereas India is the United States’ twelfth. Dollars and cents aside, what India hopes to gain most from the United States is advanced technology in various fields, thereby slashing time in indigenous development. India has expressed particular interest in access to US know-how in space, nuclear energy, high technology, and missile defence, all channelled through the framework of the High Technology Cooperation Group (HTCG), established in 2003.

It is not merely a matter of US positives for India. Dhume rightly argues that India cannot feel safe with yet another nuclear power in the region, that too an unstable Islamic one. Additionally, if an Iranian nuclear bomb pushes Saudi Arabia (and perhaps Egypt and Turkey) across the nuclear Rubicon, a nuclear arms race in the Middle East would only serve to further destabilise the region. Most importantly in the post-9/11 world, “in the long war against radicalism, India ought to welcome the weakening of a regime synonymous with Islam’s revolutionary potential, the abuse of human rights and support for terrorism.”

The question so far, however, has been “How can India help the United States (maintain the pax Americana)?” From New Delhi’s perspective, it is only fair that this query be reversed and we ask, “How can the US help India (create a pax Indica)?” For all the hype about the Indo-American strategic honeymoon (vis-a-vis China), precious little has moved forward. And expectedly so – decades of mutual suspicion can hardly be wiped away in less than two election cycles. The Next Steps in Strategic Partnership (NSSP) under which the HTCG operated, did not represent a real departure from traditional US policy – because the changes contemplated were merely at the policy level and not the legal level, the strategic steps have smacked more of strategic hesitancy. Still, even if such benefits were forthcoming, the operational advantages to Indian defense, as Ashley Tellis pointed out, would remain quite meager for a while.

While Foggy Bottom and countless political pundits wonder about how reliable an ally India is to the US, it would behoove us to ask how conscientious a partner the US has been to India – the look of betrayal US officials portray upon India’s decision to maintain relations with Iran is comical compared to the pig’s breakfast the US has made of South and Central Asia. The United States has been Pakistan’s primary supplier of armaments until 2001, and although China has taken over that mantle from the United States, Pakistan remains the largest buyer of US weapons. This remains the case despite Islamabad’s innumerous breaches of faith, not the least of which was the AQ Khan case, the Osama bin Laden residency, or covert support to the Taliban by Pakistan’s Inter Services Intelligence (ISI). For all the rhetoric about curbing the proliferation of nuclear weapons and Wahhabist ideology, Washington seems to have done a fine job of supporting both until now.

The withdrawal of troops from Afghanistan marks another instance of US vacillation on its commitments to the world order it seems to want to preserve. After a long and costly war to destroy al-Qa’ida and root out the Taliban in the mountainous Central Asian country, Western forces are now in a rush to hand over power to Afghan security forces (possibly by the end of 2013). The present plan sees the last NATO troops leave Afghanistan by 2014 after which support for Hamid Karzai’s government is questionable at best.

As things stand, the neither the Afghan-Pakistan-Taliban nor the US-Taliban negotiations seem to be producing results. Karzai, understandably, is not keen on talks with the Taliban, but Pakistan’s insistence and NATO withdrawal from his country has forced his hands. NATO’s reasons are primarily financial – with Western economies in the doldrums, it is becoming increasingly difficult to justify a war in a far off land, especially after the death of bin Laden. Understandable though the US/NATO decision is, the region lurches over a precipice due to the Western decision.

If the Taliban are allowed to reorganise and regain their strength (which they probably will, given that they are the only group in the region with a sponsor – the ISI), Kabul could yet again be source of worry for India in Kashmir and elsewhere. As a Shia power, Iran shares India’s concern more than the US does – Tehran has allowed New Delhi to develop road and rail links to Afghanistan and Central Asia, denied to her by Pakistan, from the Indian-upgraded port of Chabahar in Iranian Balochistan.

The Indo-US nuclear deal unveiled in 2005 was touted as an important step in bringing India and the United States closer to each other. While New Delhi has reiterated that US-India relations were not meant as a counterbalance to a rising China (and how could they not, as South Block seems to be unsure as to what their policy is in the first place), pro-India officials in the United States had seen the deal as exactly that. Unfortunately for them, India has turned out not to be a traditional ally. This is not to say that the US gained little to nothing through its re-engagement with India – the increased military cooperation that arose as a result of US policy towards India under George W. Bush has certainly helped both countries in various subtle ways.

 A more muscular India can help alleviate the pressure on US forces in the Pacific by forcing the Chinese to redeploy part of its military away from the Pacific and in the Tibet region. In addition, if India can be persuaded to recognize her potential to become a net provider of constructive airpower in the Indian and Pacific oceans as she has with her navy, India can be a source of stability and security in the global commons – a single midair refueling can give the IAF an operating radius from the Straits of Malacca to the Persian Gulf.

A crucial reason India cannot afford to antagonise Iran too much comes in over 425,000 barrels per day – crude oil. Not only is Iran India’s second largest supplier of oil, but India is one of the largest investors in the Iranian petrochemicals industry. Indian companies such as ONGC, IOC, OIL, the Tatas, the Essar Group, and the Hindujas are all busy in exploring for and developing oil and gas reserves in Iran. As a result, India supplies approximately 40% of Iran’s processed hydrocarbon fuels. Direct India – Iran trade stands at $13 billion, but this figures balloons to $30 billion if trade through third parties is also considered.

Although it is not impossible for India to find other sources of oil, it is probable that Indian investments in Iranian oil may be frozen if India gets on the US sanctions bandwagon against Iran. It is to be noted that the United States would not be directly affected by sanctions against Iran as its own top three suppliers are Canada, Mexico, and Saudi Arabia – and the US has shown great sensitivity to the needs of its Arabian oil connection despite all evidence connecting Saudi money to world terror and the Arab kingdom’s foray into nuclear power despite its dubious connections with Pakistani and Iraqi nuclear programmes. In contrast, Iran, the target of stringent sanctions, has broken no law but has been accused of being close to manufacturing a nuclear weapon since 1979 when it was under America’s ally, Shah Mohammad Reza Pahlavi.

Politics should not be a game of spite or revenge – all too often it results in cutting the nose off to spite the face. Therefore, while India must overlook the fickleness of US policy during the Cold War, the recent decade should very much be kept in mind as an indicator of US intentions – after all, we are still in the post-9/11 era. In this period, US foreign policy has justifiably served to further US interests, if at times beholden to domestic concerns (as Trita Parsi reveals in his Treacherous Alliance, Iran made overtures to the US throughout the 1990s and early 2000s but the US was unable to capitalise on them). Similarly, Indian foreign policy should serve Indian interests and none other.

The deal with Dassault gives India some important technology transfers that neither the US nor the Europeans offered. It is also possible that the MMRCA deal is seen by South Block mandarins as a sweetener for France when India goes  to Paris to raise money for nuclear reactors – $100 billion over 20 years, of which at least $25 billion will come from France, the Ministry of Commerce and Industry hopes. The US and India have much in common they can work on, but they have many differences too – seeing each spat as the death knell of the Indo-US rapprochement is amateurish and becomes tiresome after a while. While the US suspects India of being an unreliable ally in the future, India knows that the US has been an unreliable partner in the past. To be sure, not all elements in Iran’s theocracy see a mutually beneficial relationship with India and support Kashmiri separatism. Neither can yet another Islamic bomb fail to make South Block queasy.

However, the balance sheet at present weighs towards an Indian Iran policy that is independent of the US and the EU. That may change in the future, but as Lord Palmerston said, “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.” There is no need for New Delhi to walk on eggshells because of its Iran policy.