India's US-Iran Dilemma

UNITED STATES President Donald Trump is known to be mercurial. He has praised India as a “great country” only to mock it days later as a “tariff king”.

- Minhaz Merchant

Over the next few weeks the moment of reckoning in India-US relations will arrive. Unprecedented US sanctions on Iran kick in on November 5. Trump wants Indian imports of crude oil from Iran to drop to zero by then. That will not happen. Iran is one of India’s largest crude oil suppliers.

It allows long credit periods and accepts payment in rupees.

India has already reduced its imports from Iran to appease Washington but bringing them down to zero is impossible. Senior US officials understand this but Trump has a blind spot over Iran. If he doesn’t give India a waiver under the Joint Comprehensive Plan of Action (JCPOA), US sanctions on India could become a reality under the Federal law Countering America’s Adversaries Through Sanctions Act (CAATSA).

An additional source of friction in India-US relations is New Delhi’s decision to buy the S-400 air defence system from Russia. This too could invite sanctions under CAATSA. Is Washington prepared to compromise its evolving strategic partnership with India over Iranian oil and Russian arms? Probably not, despite Trump’s manic animosity against Iran.

India has an ace up its sleeve: China. Beijing is embroiled in a damaging trade war with the US. As the balancing pivot between the US and China in the IndoPacific, Washington cannot alienate India beyond a point. It has been quick to note China’s recent overtures towards India. Beijing too needs India in its corner as it braces for a long drawn-out trade and geopolitical battle with the US.