On Tuesday morning, Vienna played host to one of the most important diplomatic accords since the end of the Cold War. Indeed, it may be the most significant piece of American diplomacy since the 1978 Camp David accords that brought Israel and Egypt together. The Iranian nuclear dispute is not of the same vintage as the Arab-Israel one, but it is entwined with about 40 years of animosity. The sight of an Iranian foreign minister, talking, walking and laughing with his US counterpart is, therefore, remarkable.
The road to Vienna has been turbulent. The dispute erupted in its current form 13 years ago, when Iran’s secret nuclear sites were exposed, giving rise to an escalatory cycle of nuclear build-up and sanctions, taking us to the brink of war in 2011-12. A year later, Hassan Rouhani was elected to the Iranian presidency on a platform of easing sanctions and rehabilitating Iran. The bare bones of a settlement were agreed upon in Geneva in November 2013, followed by greater detail at Lausanne this April.
This week’s agreement — the Joint Comprehensive Plan of Action (JCPOA) — is the culmination of that diplomacy. It closes off Iran’s pathways to a bomb, while progressively relaxing restrictions over the next 20 years. It gives inspectors oversight of every part of Iran’s nuclear fuel cycle, while letting Iran boast it hasn’t closed a single facility. It is by no means a perfect agreement, but it is significant for what it avoids — another regional war atop the several underway.
The geopolitical consequences of Vienna remain contested. Optimists argue that this is the embryo of a US-Iran rapprochement, potentially bringing stability to Syria, Iraq, and the Persian Gulf. They point to the obvious rapport between Iranian Foreign Minister Mohammad Javad Zarif and US Secretary of State John Kerry, and to the tone of mutual respect — even admiration — that marked the post-deal statements. Pessimists point to underlying differences. They argue that Iran could use its financial windfall from sanctions relief to redouble its arms flow to Bashar al-Assad and groups like the Hezbollah and Hamas. They suggest that the Iranian regime, a half-democracy embedded in a repressive theocracy, is unlikely to open up, and is simply biding its time until the deal’s eventual expiry in the 2030s.
Both scenarios are caricatures, but caution is in order. Iran’s regional security policy remains in the hands of the Iranian Revolutionary Guard Corps (IRGC), not the urbane diplomats tweeting from Vienna. Even if Kerry and Zarif kept talking, the latter has about as much influence over developments in Syria as a Pakistani foreign minister does over Kashmir or Afghanistan. Iran’s Supreme Leader, Ayatollah Khamenei, backed this deal to stanch his regime’s economic bleeding — not as a pathway to normalisation. Washington, for its part, will be focused on reassuring Israel and Saudi Arabia. This will include fresh arms sales and renewed support for the Saudi bombing in Yemen against what Riyadh portrays as Iranian proxies.
What does the agreement mean for India? The economic effects will be significant, though largely deferred. As American sanctions escalated, Indian imports of Iranian oil roughly halved in volume between 2010 and 2015. Indian investment in Iran’s oil and gas sector, notably the Farzad B field, also dried up. The lifting of sanctions, probably in six to nine months, will allow Iran to offload the 20 million barrels of oil it has in storage. It will then take well into 2016 for daily production to ramp up. When it does, the dampening effect on oil prices should boost India’s economy. The investment picture is less certain. Indian investors failed to take advantage of the Iranian market during Tehran’s period of isolation and will face increasing Western competition for Iran’s large but politically fraught $185 billion market in oil and gas.
Strategically, India has often viewed Iran as a natural ally in Afghanistan, after the two countries cooperated in support of the anti-Taliban Northern Alliance in the 1990s. This is particularly important for India in light of the Afghan government’s controversial rapprochement with Pakistan, China-brokered talks between Kabul and the Taliban, and the potentially adverse effect on India’s position. However, New Delhi might be disappointed. Unlike in the 1990s and early 2000s, Iran is deeply committed on its western flank, in both Iraq and Syria. And although Tehran remains opposed to a Taliban takeover, in recent years, it has received multiple high-level delegations from the group, most recently in May. This is a pragmatic response not just to the emerging Kabul-Islamabad diplomacy, but also to the growing threat of the Islamic State in southern and western Afghanistan.
In a number of other areas, rhetoric has outpaced substance. More broadly, Prime Minister Narendra Modi met Rouhani this week at the BRICS summit and discussed regional connectivity. But Indian involvement in the chimerical Chabahar port, a project as old as the nuclear dispute itself, has proceeded at snail’s pace — largely because it has been treated as a commercial rather than a strategic issue. On terrorism, Iran’s stance on the Islamic State might look favourable compared to the Gulf monarchies’ continued support for Islamist rebels. But given the nature of India’s targets, New Delhi would probably find more value in improved counter-terrorism collaboration with the latter — notably Saudi Arabia the United Arab Emirates — than with Tehran. And, although this is no bar to cooperation, remember that Iran’s approach to counter-terrorism is every bit as selective, with ample support for both Sunni and Shia groups that target civilians.
Over the past decade, when asked to choose between Washington and Tehran, New Delhi has repeatedly opted for the former. It has voted against Iran at the IAEA, complied with American sanctions, and rationed prime ministerial trips to Iran (once in the last 14 years, though Modi has said he will go). The India-Iran relationship has ticked over, but hardly thrived. The Vienna agreement will create a more permissive environment for India to redress this. But India will be courting a more distracted Iran, with many more suitors.
The writer is senior research fellow, Royal United Services Institute, London
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