January 26, 2012

U.S. Must Ensure Relations with India don’t Fracture over Iran

Featuring Richard Fontaine

Iran is the crisis of the hour in Washington, and for the first time in recent memory talk now routinely turns to military action. In an effort to forestall Tehran’s pursuit of a nuclear weapon, the United States has launched a worldwide effort to limit Iran’s oil exports and increase the economic stress on the Iranian regime. Where sanctions on Iran were once seem as a somewhat quixotic American campaign, they are about to go worldwide; the United States will soon sanction firms that do business with Iran’s Central Bank, which now processes a large percentage of oil transactions. The European Union, meanwhile, is poised to embargo Iranian oil and Asian countries, including South Korea and Japan, are enlisting in the effort to economically isolate Iran. 

As this effort proceeds, Americans will inevitably look to India, the fourth-largest importer of Iranian oil. But they will see a view of Iran that looks very different in New Delhi than it does in Washington. This difference over Iran poses a genuine problem to the two countries and, unless it’s bridged, it could throw a tremendous spanner into the machinery of U.S.-India relations.

It’s difficult to overestimate the importance of the Iranian nuclear threat in the minds of most American policymakers. They see in Tehran a regime that pursues an atomic weapon capacity at the same time that has aided American enemies in Iraq and Afghanistan, supports Hizbollah, Hamas and the thuggish regime in Syria, allegedly tries to assassinate the Saudi ambassador to the United States, and threatens to close the Strait of Hormuz, all while denying the Holocaustand threatening death to America. An Iranian nuclear weapons capacity, many policymakers fear, could hand Tehran a deterrent behind which to pursue an even more aggressive drive for regional domination, set off a regional arms race, and threaten the stability of the Middle East.

In New Delhi, the picture looks very different. India imports roughly 12 percent of its oil from Iran, and because Pakistan blocks Indian commerce through Afghanistan to Central Asia, Iran forms a key transit Indian transit route. Indian Shia comprise a relatively small percentage of the population, but represent an important swing vote in elections. India and Iran have long cultural and population ties, and in 2006, Prime Minister Manmohan Singh went so far as tell an American interviewer that, “Our relations with Iran, we cherish a great deal.” 

Yet this has begun to change around the edges. The talk of cherishing ties has faded, and India has begun increasing its purchases of Saudi oil. Singh has said explicitly that India opposes an Iranian nuclear weapon, and New Delhi voted to censure Iran at the International Atomic Energy Agency.

Still, the new U.S.-led sanctions push may put Washington and New Delhi on opposite sides of this critical issue. Asked about America’s new sanctions, Indian Foreign Secretary Ranjan Mathai said this past week: “We have accepted sanctions which are made by the United Nations. Other sanctions do not apply to individual countries. We don’t accept that position.” Indeed, he went further, noting that an Indian delegation would travel to Iran to “work out a mechanism for uninterrupted purchase of oil from Iran.” And India and Iran have reportedly agreed to settle some of their oil trade in rupees to avoid restrictions on dollar-denominated trade. 

Thus far, Washington and New Delhi have chosen to emphasize the areas of agreement – the IAEA votes, their shared opposition to an Iranian nuclear weapon – and downplay the disagreement on how to achieve that objective. But with the issue heating up in Washington and other world capitals, and with the new U.S. sanctions poised to go into effect, there’s the danger of a real impasse. Members of the U.S. Congress will be dismayed if India appears to stand outside a concerted international effort to press Iran at a critical inflection point. Members of the Indian parliament, for their part, will not particularly appreciate being publicly goaded to get tough on Iran.

The collateral damage could be the U.S.-India relationship. A falling out over Iran could infect other elements of the budding strategic partnership, and make everything else – from trade to defense cooperation to diplomatic coordination – more difficult.

The United States and India should urgently seek ways to bridge their differences over Iran. A genuine partnership on this issue might see India using its unique role to carry messages to the Iranian leadership and provide insights about Iranian behavior to the American side, while the United States works with New Delhi to pressure Iran on a variety of fronts. For the sake of preventing a nuclear-armed Iran and for the solidity of the U.S.-Indian relationship, the two nations’ respective leaders should engage on Iran, and soon.