HOURS AFTER the killing of Iran’s top military commander, General Qassem Soleimani, in an American drone strike in Baghdad Friday, India said it had “noted that a senior Iranian leader had been killed by the US”, urged restraint and called for de-escalation.
The terse statement masked the deep unease about how far the ripples from this sharp spike in US-Iran tensions will extend across the region, and impact India.
One part of that question was answered after Iran warned of retaliation, with jitters on Dalal Street over the potential for an oil shock. The stock market fell by over a hundred points, but more telling was the rupee’s 38-paise drop around the same time to Rs 71.74 to the US dollar. India’s oil import bill in 2018-19 was $111.9 billion. And the new geopolitical tensions could not have come at a worse time, when the economy is crawling at 4.5 per cent GDP growth in Q2 this fiscal year.
With Iran vowing revenge, a possible widening of the US-Iran conflict, from Saudi Arabia to Afghanistan and Pakistan, will not leave India unaffected. “We have to see what Iran’s options are. There will be enormous rage in Iran, but how will Iran retaliate? The power differential between the two is huge. If Iran does retaliate, it will know that the US will hit back, too,” said Vivek Katju, former diplomat who was in charge of the Iran desk at the Ministry of External Affairs.
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Describing the killing as “one of the most consequential events in world history for quite some time”, Michael Kugelman, deputy director of the South Asia Programme at the Wilson Center in Washington DC, told The Indian Express that it is bound to impact India because of its geographic and political proximity to all countries in West Asia.
“The unrest we are likely to see in the Middle East, and the strong possibility of some kind of war, means that India will now be under increasing pressure to focus more on foreign affairs at a moment when its government has been intensifying the pursuit of its social agenda,” Kugelman said.
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India’s diplomatic challenges, said Kugelman, would be “how to position itself in the Saudi-Iran rivalry”, as well as balance its relations with the US and Iran.
At time when India’s oil ties with Iran have been stalled by American sanctions, External Affairs Minister S Jaishankar visited the US last month along with Defence Minister Rajnath Singh for the 2+2 dialogue to strengthen defence ties.
Days after meeting President Donald Trump in Washington, Jaishankar went to Tehran for “joint commission” talks with his counterpart Javad Zarif. The two sides agreed to “accelerate” work on the Chabahar port, which is India’s big ticket hedge against Pakistan and China, and the gateway to a land route through Iran to Afghanistan and central Asia. India is reported to have got a “written assurance” from the US that it will facilitate bank loans for the project.
But, said Kugelman, that balancing act could have just got more difficult. “We are beyond the point where New Delhi could hope that simply calling on Tehran and Washington to exercise restraint would make things better. This is a crisis that is in an inevitable escalatory phase for the time being. How India squares that circle [of wanting strong ties with both Washington and Tehran] will pose one of its biggest diplomatic tests in the coming weeks,” he said.
These challenges also come at a time when India is witnessing intense unrest among its minorities over the new citizenship law, which is also being seen as having alienated a lot of its friends, including many Muslim countries.
“India has tried to balance its relationships within the region and with the US and Iran, and escalation might result in countries putting pressure on it to make choices Delhi does not want to make,” said Tanvi Madan, senior fellow at Brookings Institute in Washington.
Any threat of conflict or destabilisation in the region also brings back the spectre of thousands of stranded Indian expatriates. In every such crisis — the first Gulf War, the 2003 Iraq war, the Arab spring in Egypt, the 2014 Islamic State takeover of Iraq, the conflict in Yemen — the government has had to mount a huge rescue effort.
Even without an evacuation, any potential risk situation makes the Indian diaspora in West Asia vulnerable to disruptions in jobs and salaries. Remittances back to India, which form a substantial chunk of foreign exchange reserves, are the other side of this story.
In its statement on Soleimani’s killing, India said: “The increase in tension has alarmed the world. Peace, stability and security in this region is of utmost importance to India. It is vital that the situation does not escalate further. India has consistently advocated restraint and continues to do so.”
Afghanistan and Pakistan are also bracing for the fallout, with American military bases, soldiers and other US interests in both countries.
“I see Afghanistan in great danger of coming into the crosshairs. In any conversation about potential Iranian reprisals, there needs to be some discussion on the 12,000 troops that are right next door [to Iran] in Afghanistan. Let us also keep in mind that while Iran is allied with the Afghan government and officially opposes the Taliban, Tehran has covertly provided episodic support to the insurgents to push back against the US. Tehran now has a sky-high incentive to scale up that covert support,” Kugelman said, pointing out this made it all the more essential for the US to reach an agreement with the Taliban quickly.
Pakistan, which shares a border with Iran along the restive Balochistan, would be concerned too, and like India, has ties with Saudi and the US that are essential to its existence. Its ties with Iran are uneven, but both sides constantly make an effort to overcome that.
In February 2019, Tehran accused the Imran Khan government of a role in the Pulwama-like bombing of a bus in which 27 IRGC commandos were killed close to the Zahedan border with Pakistan, warning it against playing to a US tune. “At the very least,” said Kugelman, “the US and Pakistan will have to be on guard for Iranian covert reprisals against the US in Pakistan.”
For India, according to Madan, there is also “a more medium to long-term concern… that any escalation could keep US focussed on the Middle East rather than China/Indo-Pacific”.