Gateway House Iran's time has come

On July 14, Iran and the UN Security Council’s permanent members, and Germany arrived at a landmark agreement, regarding Iran’s nuclear programme. The deal, negotiated over nine years, the last two of which were the most intense, has been hailed as “historic” by its supporters and castigated as a “historic failure” by its detractors. It will, in essence, constrain Iran’s nuclear programme and ability to manufacture a bomb by reducing its uranium enrichment capacity for the next 10-15 years. In exchange, UN and western sanctions against Iran that were first imposed in 1979 and became more stringent in subsequent years, will begin to be gradually lifted as the International Atomic Energy Agency signs off on Tehran’s compliance with its Non-Proliferation Treaty obligations.

This will bring Iran back into the global economic and political flow. The agreement, called the Joint Comprehensive Plan of Action (JCPOA), holds the key to unshackling Iran’s economy, and strengthening Iran’s currency, the value of which dropped against the dollar from 3,000 rial in 1995 to 29,089 rial now. It will also provide opportunities for Iran’s educated and outward-looking population, nearly 70% of which is below the age of 30. They have long desired an end to isolation and a rapprochement with the West.

Iran’s time has come. The international consensus on Iran’s isolation was crumbling, and the rise of an economically empowered China and a Russia embittered by the clash over Ukraine, had weakened America’s position in the UNSC, making their cooperation on continued UN-mandated sanctions against Iran, unlikely. This was evident from the proliferation of political and business delegations from China and western Europe in Iran, and in Russia’s announcement that it will supply its advanced S-300 missile defence system to Iran. And Iran’s role in combating the Islamic State (IS) in Iraq, through its Revolutionary Guards and support to Shia militias, has given it leverage with the U.S. and the West, which are fearful of the return of hardened IS fighters to their home countries, mostly in Europe.

Iran will be integrating with the world at a time of extreme chaos in West Asia. There are savage wars in Syria, Yemen and Iraq, and the continued expansion of the IS. Iran’s old enemies Saudi Arabia and Israel still oppose the lifting of sanctions. Nuclear capabilities will proliferate regionally. Israel is already an undeclared nuclear power, while Egypt, Saudi Arabia, and Turkey will embark, if they have not already, on their own nuclear weapons programmes, or seek arrangements with friendly countries that have them. A nuclear arrangement between Saudi Arabia and Pakistan is widely believed to already exist. Pakistan refers to its nuclear weapons as the “Islamic bomb,” which has been at least partly funded by Saudi largesse.

For India, Iran’s impending return to the global energy markets has clear benefits, given our massive and growing energy requirements. We have long been in discussion with Iran for transnational gas pipelines and have successfully attempted, in recent years, to acquire oil and gas exploration rights in Iran. These plans should be accelerated, including the acquisition of small and mid-sized Iranian and other oil and gas assets, whose values have dropped by as much as 70% in the past year due to lower oil prices. This will secure out future energy needs.

India also has an interest in expanding the export to Iran, of inorganic chemicals, food, refined petroleum products, agricultural machinery, pharmaceuticals, vehicles and other items, and new products such as aero-structure components.

To promote these interests, Minister of Road Transport and Highways Nitin Gadkari visited Iran in June. He signed a memorandum of understanding to develop Chabahar Port on the country’s south-eastern coast, and discussed connectivity projects, including the International North-South Transport Corridor (to connect India to Russia via Iran and Azerbaijan). With the JCPOA in place, it will be easier to finance and execute these projects.

Later this year, Prime Minister Narendra Modi is to visit Saudi Arabia and Israel. Iran should surely be on the agenda, and Modi must use his diplomatic skills to ensure that India and Iran become partners in securing Afghanistan, and enhancing connectivity with an emerging Eurasia.

Ambassador Neelam Deo is Director, Gateway House

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