The US-Iran tussle in Middle-East throws a difficult challenge for India

Published: January 9, 2020 5:33:07 PM

At a time when the Indian economy is facing strong economic headwinds, a spike in global oil prices will further depress the economic sentiment in the country.

Qasem Soleimani killing, iran missile attack, baghdad airport attack, baghdad, iran attack, us iran war, iran war with americaAnti-government protesters set fires to close a street near Tahrir Square in Baghdad, Iraq, Wednesday, Jan. 8, 2020. (AP Photo)

By Commodore Anil Jai Singh (Retd)

The gloves are off in the US-Iran imbroglio. On the night of 07/08 January, Iran launched a ballistic missile strike on US facilities in Iraq in retaliation for the killing of General Soleimani, the head of the Revolutionary Guard and one of the most powerful men in Iran by the US in a drone strike on Iraqi soil. So far there has been a muted response from the US as it assesses the damage but the potential for escalation is immense. Iran has also warned Israel and Saudi Arabia to not interfere. It is, of course, hoped that saner voices will prevail and this explosive situation is diffused but it will not be easy. Efforts are already in hand to do so.

In the event of an escalation in a stand-off between the US and Iran, there are serious geopolitical, economic and security implications for India. More than 50% of India’s energy supplies are sourced from Iran and the Arabian Gulf states. The single largest source of foreign remittances which anchor our healthy foreign exchange reserves are from the Indian diaspora in West Asia. About 20% of our trade is with the region. India has a major strategic interest in developing the Chabahar Port from where it seeks access to land-locked Central Asia through the North-South Trade Corridor (NSTC).

India has had traditionally good relations with Iran and has deftly balanced its relationship with Iran, Saudi Arabia, Israel and the US. This development could well upset this delicate equilibrium. The US could now bring pressure to bear on India to follow sanctions on Iran or face punitive action by the US. At a time when both Russia and China are making overtures to Iran with a recent trilateral naval exercise having just been completed off Chabahar, there is a great deal at stake for India which may have to make some uncomfortable choices.

At a more immediate level, the biggest threat to Indian interests would be the security of India’s energy supplies from this region and consequently India’s energy security itself. At a time when the Indian economy is facing strong economic headwinds, a spike in global oil prices will further depress the economic sentiment in the country. Disruption in oil flows would deplete India’s strategic oil reserves as well as affect India’s refining capacity which is an important source of export earnings with strategic implications.

From an operational and tactical perspective, Iran’s threat to target shipping and block the Straits of Hormuz, as it had threatened after the Saudi oil facility was targeted from Yemen led India to deploy two warships in the Gulf to safely escort tankers carrying oil for India. A similar situation could arise again necessitating a similar deployment to ensure the security of India’s energy. Similarly, if all countries whose energy is sourced from West Asia were to send warships there to ensure the safe passage of their tankers, there would be a plethora of warship, some seen as an adversary by Iran, there would be a distinct possibility of an unintended incident at sea which would have its potential for escalation thus further disturbing the fragile peace in the area.

In the event of a situation likely to worsen, the Navy would be called upon to evacuate the Indian diaspora in the region as has been done in earlier instances in Lebanon in 2006 and from Yemen a few years ago. India would be following the situation of the stakes involved and would also be shaping its response accordingly.

(The author is Vice President and Head-Delhi branch, Indian Maritime Foundation. Views expressed are personal.)

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