Iran’s Nuclear Program & Western Sanctions

Iran’s Nuclear Program & Western Sanctions

Sanctions and pandemic: On America’s Iran policy

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- The US sanction are adding to the woes of Iran in dealing with the covid-19 pandemic.

Context

The US has refused to ease the sanction on Iran even as it is struggling hard to control the spread of the virus.

Sanctions adding to the difficulties of Iran

  • Disregard to the humanitarian situation: America’s refusal to ease sanctions on Iran even when the West Asian country is struggling hard to contain the novel coronavirus spread with limited resources shows its total disregard for the humanitarian situation in the Islamic Republic.
  • Iran, the hardest hit by the pandemic in West Asia, has already seen 3,739 deaths and 62,589 infections.
  • Iran’s failure: To be sure, Iran failed on multiple fronts in the battle. The government was initially reluctant to enforce drastic restrictions on businesses, religious establishments and people.
  • As infections began spreading at an exponential pace, it was more than what Iran’s health-care system could handle.
  • Failures accentuated by sanctions: And during the crisis, the cash-strapped, isolated regime struggled to meet people’s needs. But what accentuated these failures are the American sanctions.
  • Last year, the sanctions, reimposed by President Trump after he unilaterally pulled the U.S. out of the Iran nuclear deal in 2018, shrank the country’s economy by 8.7%.
  • Oil price factor: The fall in oil prices and the pandemic have multiplied Iran’s woes.
  • The sanctions have also debilitated its ability to import even humanitarian goods.
  • Rejection by the US to ease sanctions: The U.S. rejected calls for easing sanctions, saying exports of these goods to Iran are already exempted. But it is not that easy.
  • Banks fearful of US action: Most global banks, fearing U.S. retaliation and legal consequences, stay away from doing business with Iran, which makes it difficult for the Islamic Republic to find a functional payment mechanism.
  • With the economy in dire straits, it also lacks the resources to make purchases.

Why should the US ease sanctions?

  • The U.S., which has the most number of COVID-19 infections, should be in a better position to understand Iran’s woes than any other country.
  • Despite the U.S. being the world’s largest economy, and home to a gigantic health-care industry, authorities there appear clueless on quick containment.
  • Learning from its own tragedy, Washington should have suspended or at least eased the sanctions on Iran, allowing the country to import food, medicines and other humanitarian goods without restrictions.
  • Such a decision would also have provided an opportunity to both countries — on the brink of a military conflict early this year — to resume diplomatic engagement.
  • It is still not too late for Mr Trump to take a humanitarian decision and turn it into a diplomatic opening.

What Iran should do?

  • The Iranian leadership should realise that this is not the time for America-bashing.
  • Focus on getting help: This is an hour of crisis, globally. Tehran’s focus should be on getting maximum help from abroad and beefing up its fight at home to save lives.
  • Supreme Leader Ayatollah Khamenei’s recent comment that Iran “has the capability to overcome any kind of crisis and challenges” is far removed from reality.

Conclusion

Iranians need help and the U.S. should reconsider its policy of punishing them, at least in this time of a pandemic. This could open the diplomatic channel for the further talk between both the countries.

Iran’s Nuclear Program & Western Sanctions

A crisis-hit Iran at the crossroads

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Growing difficulties for Iran amid sanctions and cooperation with China and Pakistan, and implications for India.

Context

The coronavirus pandemic creates fresh possibilities for cooperation between the West Asian nation and its neighbours.

Challenges faced by Iran

  • Hardest hit by COVID-19 among the West Asian countries: Iran, the hardest-hit among the West Asian countries in the global pandemic, is on the front line of the battle against the coronavirus that causes the causes coronavirus disease, COVID-19.
  • Healthcare reeling under combined load: With nearly 900 deaths and over 14,000 cases of infection, its health-care system is reeling under the combined effect of the pandemic and American sanctions.
  • Possibility of social unrest resurfacing: The masses thronging the streets some weeks ago may have receded out of fear of both the coronavirus and the wrath of the regime, but there is a possibility of social unrest resurfacing if the government’s response to the spread of the virus is ineffective and shortages are exacerbated.
  • Emergency funding from IMF: Iran has already approached the International Monetary Fund for $5-billion in emergency funding to combat the pandemic.
  • Easing of some sanctions by the US: The U.S. Treasury had announced in end-February that it was lifting some sanctions on the Central Bank of Iran to facilitate humanitarian trade such as the import of testing kits for COVID-19. Clearly, Iran thinks this is inadequate.

Iran’s nuclear policy

  • Iran to resumed nuclear activities: Following the U.S.’s decision to jettison the deal, Iran had announced that it would resume its nuclear activities but had agreed to respect the International Atomic Energy Agency (IAEA) inspections and enhanced monitoring as part of its obligations under the additional protocol.
  • What were the conditions of JCPOA? The JCPOA limited Iran to enrich uranium only up to a 3.67% concentration and its stockpile to 300 kg of UF6 (corresponding to 202.8 kg of U-235), and further capped its centrifuges to no more than 5,060, besides a complete cessation of enrichment at the underground Fordow facility.
    • It also limited Iran’s heavy water stockpile to 130 tonnes.
  • Restriction on enrichment lifted by Iran: Since July 2019, Iran has lifted all restrictions on its stockpiles of enriched uranium and heavy water.
    • It has been enriching uranium to 4.5%, beyond the limit of 3.67%.
    • Moreover, it has removed all caps on centrifuges and recommenced enrichment at the Fordow facility.
    • An increased stockpile of Uranium: As of February 19, Iran’s enriched uranium stockpile totalled 1,020.9 kg, compared to 372.3 kg noted in the IAEA’s report of November 3.
    • IAEA’s second report: In a second report issued on March 3, the IAEA has identified three sites in Iran where the country possibly stored undeclared nuclear material or was conducting nuclear-related activities.
    • The IAEA has sought access to the suspect sites and has also sent questionnaires to Iran but has received no response.
  • Possibility of being on the collision course with the UNSC: The United Kingdom, France and Germany had invoked the JCPOA Dispute Resolution Mechanism (DRM) as early as in January this year.
  • The threat to abandon the NPT: With the next Review Conference of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) set to take place in New York from April 27 to May 22, 2020, Iran’s threat to abandon the NPT if the European Union takes the matter to the UN Security Council (UNSC) may yet only be bluster, but the failure of the DRM process would certainly put Iran on a collision course with the UNSC.
  • Support from China at UNSC: A sympathetic China, which holds the rotational presidency of the UNSC for March, should diminish that prospect, albeit only temporarily.
  • Possibility of reversing the sanctions: As things stand, the terms of UNSC Resolution 2231, which had removed UN sanctions against Iran in the wake of the JCPOA, are reversible and the sanctions can be easily restored.
    • That eventuality would prove disastrous, compounding Iran’s current woes.
  • Possibility of Iran continuing its nuclear program: While recognising that cocking a snook at the NPT in the run-up to the NPT RevCon and the U.S. presidential elections will invite retribution, Iran may use the global preoccupation with the pandemic to seek a whittling down of sanctions and to continue its nuclear programme.
    • More breathing time amid due to pandemic: In the event that the NPT RevCon is postponed due to the prevailing uncertainty, Iran may yet secure some more breathing time.

Iran’s ties with China and implications for India

  • China- only major country to defy the US sanctions: Meanwhile, the U.S. continues to implement its “maximum pressure policy”. China remains the only major country that continues to defy U.S. sanctions and buy oil from Iran, apart from a small quantum that goes to Syria.
    • The sale of oil to China, however, does little to replenish Iran’s coffers. China is eschewing payments in order to avoid triggering more sanctions against Chinese entities.
  • Trilateral naval exercise: When seen in the context of the trilateral naval exercise between China, Iran and Russia in the Strait of Hormuz in the end of December 2019 codenamed “Marine Security Belt”, these developments suggest a further consolidation of Sino-Iran ties in a region of great importance to India.
    • Inclusion of Pakistan in the exercise: Over time, this could expand into a “Quad” involving China’s “all-weather friend” Pakistan in the Indian Ocean and the northern Arabian Sea, with broader implications for India as well as the “Free and Open” Indo-Pacific.

Conclusion

  • Iran’s foreign policy to remain unchanged: The first round of Iran’s parliamentary elections in February showed that the hardliners are firmly ensconced. The fundamental underpinnings of Iran’s foreign policy are likely to remain unchanged.
  • Possibility of cooperation among neighbours: Yet, the rapid spread of the coronavirus in the region creates fresh possibilities for cooperation between Iran and its neighbours, if regional tensions are relegated to the back-burner.
  • Laudable example by India: Prime Minister Narendra Modi’s initiative to develop a coordinated response to the pandemic in the South Asian Association for Regional Cooperation framework, indeed, sets a laudable example.
  • Much depends on Iran’s willingness: Much though will depend on Iran’s willingness to rein in its regional ambitions and desist from interference in the domestic affairs of others.

Iran’s Nuclear Program & Western Sanctions

[op-ed snap] Iran’s tightrope

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much.

Mains level : Paper 2- Events in the Middle East, especially involving Iran and its implications for India.

Context

In the aftermath of recent events, Iran needs a new compact to deal with the domestic crisis and also a framework to deal with the US.

The threat of “regime change” in Iran

  • The US policy-The temptation for a policy of “regime change” in Iran has never disappeared from the US policy towards Iran.
    • The policy is based on the hope that mounting external pressure and deepening internal dissent will combine to produce a “regime collapse” in Tehran.
    • US President has often insisted that he is not seeking to overthrow the clerical regime in Tehran led by Ayatollah Ali Khamenei.
    • The Us demands were an end to the nuclear and missile programmes, stop supporting terror in the region and end the interference in the internal affairs of its Arab neighbours.
  • Iran’s success in fending off these threats: Iran has been successful so far in fending off these external and internal challenges.
    • Iran has put down repeated mass uprisings and neutered attempts from within the elite to reform the system.

De-escalation of the tension after the war-like situation

  • Fear of escalation: The widespread assessment after the killing of Soleimani was that Iran would inevitably escalate the confrontation.
    • Tehran set up a token retaliation for domestic political consumption and quickly called for de-escalation.
  • The message of peace from the US: Trump also told the Iranian leaders that America “is ready to embrace peace with all who seek it”.

The shooting of a passenger jet and the aftermath 

  • The shooting of the jet:
    • The Ukrainian passenger jet was shot-down near Tehran killing all 176 passengers and crew on-board.
    • It included 82 Iranian nationals and many Canadian citizens of Iranian origin
  • After initial denial, Tehran was forced to accept responsibility for shooting down the plane.
  • The aftermath of the shooting of the plane
    • Protests: Soon after the confession, protests broke out against the government.
    • Demand for accountability: Iranians are angry at the attempt of the government to cover up initially and are demanding full accountability.

The general discontent of the people against the government

  • The latest round of protests must be seen as a continuation of those that have raged since the end of 2017.
  • Reasons for the discontent: Economic grievances, frustration with widespread corruption, demands for liberalising the restrictions on women and political opposition to the regime are the reasons.
  • Discontent against external adventures: There was also strong criticism of the government’s costly external adventures in the Middle East amidst the deteriorating economic conditions.
    • There is little love for the Revolutionary Guards, the principal face of state oppression.
  • External pressure: As the regime cracks down on the protests against the airliner shooting, the external pressures against Iran are only likely to mount.

Available option and their dangers

  • As sanctions squeeze the Iranian economy, the costs of regional overreach become apparent, and internal protests become persistent, Khamenei has few good options.
  • The option of the new political compact: Offering a new political compact to the people of Iran or a new framework to deal with the Arab neighbours and the US would seem reasonable goals.
    • But they involve considerable risk for the regime.
  • The option of pragmatism: All revolutionary regimes come to a point when they need to replace ideological fervour with pragmatism.
    • But the change from ideological fervour to pragmatism is also the time of the greatest vulnerability for the regime.

Conclusion

India as a friend of Iran will surely begin to debate if privately, the implications of the deepening regime crisis in Iran.

Iran’s Nuclear Program & Western Sanctions

Instrument in Support of Trade Exchanges (INSTEX)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : INSTEX

Mains level : Global financial mechanisms


Six new European countries have joined the INSTEX barter mechanism, which is designed to circumvent U.S. sanctions against trade with Iran by avoiding use of the dollar.

Instrument in Support of Trade Exchanges (INSTEX)

  • The INSTEX is a European special-purpose vehicle (SPV) established in January 2019.
  • It is a barter mechanism to facilitate non-USD transactions and non-SWIFT to avoid breaking U.S. sanctions.
  • It functions as a clearing house allowing Iran to continue to sell oil and import other products or services in exchange.
  • The system has not yet enabled any transactions.

Members

  • Six Countries – Belgium, Denmark, Finland, the Netherlands, Norway and Sweden have recently joined INSTEX.
  • France, Germany and the UK are its founding members.

Iran’s Nuclear Program & Western Sanctions

[op-ed snap] Seize the opening

Note4Students

From UPSC perspective, the following things are important :

Prelims level : JCPOA

Mains level : Iran nuclear deal - Implications for India

Context

The spokesperson for Iran’s nuclear agency announced that the country had the ability to enrich uranium up to 20% and it had launched advanced centrifuge machines.

Implications

    • This further violates its commitments under the Joint Comprehensive Plan of Action (JCPOA). 
    • It is also an escalation of the brinkmanship since US President Donald Trump withdrew from the JCPOA in May 2018. 

JCPOA

    • The 2015 JCPOA came into being after arduous negotiations.
    • It placed restrictions on Iran’s nuclear programme and removed the harsh economic sanctions on the country. 
    • Since the US’s withdrawal from the deal, the Trump administration has ramped up the sanctions, and its anti-Iran rhetoric. Iran has flouted the limits placed on its nuclear programme. 
    • The US assumed that the sanctions would increase disaffection in Iran to such a degree that the government would be overthrown. 
    • The moderate, democratically-elected Rouhani government has suffered due to the sanctions. The nuclear deal was pushed despite the recalcitrant sections of the Islamic state as opposed to any accord with the US.

Indian role

    • India has managed to walk the diplomatic tightrope between the US and Iran.
    • India has a very close relationship with the US and also has close historical and trade ties with Iran.
    • India could join Paris and other world powers in nudging both countries towards talks. 

Back2Basics

JCPOA

JCPOA or the Iran nuclear deal between Tehran and the US, France, Germany, Britain, Russia and the European Union

Iran’s Nuclear Program & Western Sanctions

Explained: Strait of Hormuz — the world’s most important oil artery

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Strait of Hormuz

Mains level : US-Iran turmoil and its impact on India

Why in news?

  • The Strait of Hormuz, a vital shipping route linking Middle East oil producers to markets in Asia, Europe, North America and beyond, has been at the heart of regional tensions for decades.
  • Recently two Saudi oil tankers were among vessels targeted in a “sabotage attack” off the coast of the UAE, condemning it as an attempt to undermine the security of global crude supplies.
  • Iran’s foreign ministry called the incidents “worrisome and dreadful” and asked for an investigation.

Strait of Hormuz

  • The Strait of Hormuz is a strait between the Persian Gulf and the Gulf of Oman.
  • It provides the only sea passage from the Persian Gulf to the open ocean and is one of the world’s most strategically important choke points.
  • The waterway separates Iran and Oman, linking the Gulf to the Gulf of Oman and the Arabian Sea.
  • The Strait is 21 miles (33 km) wide at its narrowest point, but the shipping lane is just two miles (three km) wide in either direction.

Why does it matter?

  • The US Energy Information Administration estimated that 18.5 million barrels per day (bpd) of seaborne oil passed through the waterway in 2016.
  • That was about 30 per cent of crude and other oil liquids traded by sea in 2016.
  • With global oil consumption standing at about 100 million bpd, that means almost a fifth passes through the Strait.
  • Most crude exported from Saudi Arabia, Iran, the UAE, Kuwait and Iraq — all members of the Organization of the Petroleum Exporting Countries are shipped through the waterway.
  • It is also the route used for nearly all the liquefied natural gas (LNG) produced by the world’s biggest LNG exporter, Qatar.

Why always in turmoil?

  • During the 1980-1988 Iran-Iraq war, the two sides sought to disrupt each other’s oil exports in what was known as the Tanker War.
  • The US Fifth Fleet, based in Bahrain, is tasked with protecting the commercial ships in the area.
  • The fleet ensures that the critical waterway remains open, provocative Iranian military maneuvers are likely in the immediate offing as is a nuclear restart.
  • Iran agreed to rein in its nuclear programme in return for an easing of sanctions under a 2015 deal with the United States and five other global powers.
  • Washington pulled out of the pact in 2018. Western powers fear Iran wants to make nuclear weapons. Tehran denies this.
  • The UAE and Saudi Arabia have sought to find other routes to bypass the Strait, including building more oil pipelines.

Have there been incidents in the strait before?

  • In January 2012, Iran threatened to block the Strait in retaliation for US and European sanctions that targeted its oil revenues in an attempt to stop Tehran’s nuclear programme.
  • In May 2015, Iranian ships fired shots at a Singapore-flagged tanker which it said damaged an Iranian oil platform, causing the vessel to flee. It also seized a container ship in the Strait.
  • In July 2018, Iranian President hinted Iran could disrupt oil flows through the Strait in response to US calls to reduce Iran’s oil exports to zero.
  • A Revolutionary Guards commander also said Iran would block all exports through the Strait if Iranian exports were stopped.
  • The US in turn declared the guards a terrorist organization.

Iran’s Nuclear Program & Western Sanctions

How not to choose among allies

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From the UPSC perspective, the following things are important:

Prelims level: Joint Comprehensive Plan of Action (JCPOA)

Mains level: US sanctions on Iran and why India should not toe the line as sketched by the US


Context

India’s role in JCPOA negotiations

  1. In May 2012, Hillary Clinton, then U.S. Secretary of State, visited Delhi on behalf of the Western countries negotiating the Joint Comprehensive Plan of Action (JCPOA), or the nuclear deal, with Iran, to convince India to cut its oil imports from Iran
  2.  India needed various reasons to help put pressure on Iran to return to the negotiating table for the six-party talks
  3. India agreed to cut its imports by only about 15%
  4. But cumulative global pressure had the desired impact on Iran, where inflation had risen more than 40% and oil exports declined from 2.5 million barrels of crude each day to about 1 million
  5. JCPOA negotiations that followed eventually led to a deal hailed by the United Nations, that had quarterbacked the talks all through

Current scenario

  1. The sanctions that the U.S. now proposes trying to ensure India adheres to have been placed not in order to forge any deal, but because the Trump administration has walked out of the JCPOA
  2. In this, the U.S. has no support from any other country involved in the deal, and the UN has expressed grave misgivings about the decision
  3. The U.S. has given no evidence that Iran in any way violated the terms of the JCPOA — in fact, the International Atomic Energy Agency’s June report concluded that Iran’s stockpile of uranium and heavy water, as well as its implementation of additional protocols, were “in compliance” with the agreement
  4. Unlike in 2012, the U.S.’s EU allies are now working closely with arch rivals like Russia and China to put a “special payments mechanism”, primarily with a view to supporting trade to Tehran to ensure that the Iranian regime does not walk out of the nuclear deal as well
  5. The US  is increasingly being isolated politically, as was evident at the most recent Financial Action Task Force meet in Paris where the U.S. proposed sanctions on Iran for terror funding

Impact on India

  1. There is the shock that sanctions would deal to the oil import bill, given that Iran is India’s third largest supplier
  2. There are not only rising costs of oil to contend with, but also the added cost of having to recalibrate Indian fuel refineries that are used to process Iran’s special crude
  3.  India’s investment in the Chabahar port would face both direct and indirect sanctions: as shippers, port suppliers and trading companies refuse to participate in the project
  4. This problem will only get more acute as sanctions kick in, threatening India’s $500 million investment in the port and its $2 billion plan for a railway line to circumvent Pakistan and reach Afghanistan and Central Asian trade lines
  5. There would be the impact on India’s regional security situation, which could see the Iranian-Arab divide deepen, Afghanistan’s choices dwindle and an angry Iran pitched closer into the China-Russia corner
  6. All of the above outcomes will follow regardless of whether the U.S. gives India a waiver for sanctions or not
  7. Along with the JCPOA-linked sanctions, India continues to face sanctions linked to the Countering America’s Adversaries Through Sanctions Act, which puts more strictures on dealings with Iran, Russia and North Korea

Iran’s possible reaction

  1.  With trade levels receding, the Iranian regime may well lose interest in the Chabahar option, and focus on its main port of Bandar Abbas instead, derailing India’s grander plans for regional connectivity
  2. All of India’s sacrifices may come to naught, as Mr. Trump may well use the pressure placed on Iran to his own advantage, and possibly open talks with Tehran at a later date

India’s affection with the US

  1. Indian officials have made a beeline for Washington to discuss the reasons why India deserves a waiver, from both Iran and CAATSA sanctions
  2. The U.S. has been apprised of India’s energy requirement compulsions, and of the cut of about 35-50% in its oil purchases from Iran
  3. On the CAATSA front, the U.S. has also been assured of a significant reduction in Indian defence dependence on Russia, and that no weapons procured, like the recently purchased S-400 missile system, would be used against American interests
  4. Given the heavy costs and in the complete absence of any benefits, it is surprising that the government has not been more vocal in its protest against the U.S.’s actions

Way forward

  1. If the U.S. presses on with sanctions, it would be a marked failure of Indian diplomacy
  2. And if the waiver does come through, as is indicated, it will be no victory, but signify an abject submission to the sanctions themselves
  3. With no gains in the offing from a policy of ‘pragmatism’, India may have been better off sticking to principle instead

Iran’s Nuclear Program & Western Sanctions

US agrees to grant India waiver from Iran oil sanctions: Report

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From UPSC perspective, the following things are important:

Prelims level: Not Much

Mains level: Changing dynamics of US policies and its impact on India


The impending US sanctions

  1. The impending oil sanctions have been a U.S. tool to pressure Iran in the six months since Trump backed out of the 2015 nuclear deal between the Middle East nation.
  2. US argue that Iran didn’t do enough to constrain the Islamic Republic’s nuclear program or curb what the U.S. calls other “malign activity” in the region.

Waiver for controlling Global Oil Prices

  1. The US has agreed to let eight countries – including Japan, India and South Korea – keep buying Iranian oil after it re-imposes sanctions on the OPEC producer.
  2. While the Trump administration’s goal remains to choke off revenue to Iran’s economy, waivers are being granted in exchange for continued import cuts so as not to drive up oil prices.
  3. China – the leading importer of Iranian oil – is still in discussions with the U.S. on terms, but is among the eight.
  4. The other four countries that will get waivers weren’t identified.

Temporary Exemptions

  1. The waivers are only temporary, and the U.S. will expect countries that get them to keep cutting Iranian imports in the months ahead.
  2. The Trump administration has asked that those nations also cut other economic ties with the Persian Gulf state, such as by reducing trade in goods that aren’t covered by the sanctions.

Iran’s Nuclear Program & Western Sanctions

[op-ed snap] A tough balancing act between geopolitical realities and energy security

Note4students

Mains Paper 2: IR | Effect of policies & politics of developed & developing countries on India’s interests, Indian diaspora

From the UPSC perspective, the following things are important:

Prelims level: OPEC, INSTC

Mains level: Impact of US sanctions on Iran on the global economic and geopolitical order


Context

US sanctions on Iran

  1. The US oil and banking sanctions against Iran will come into effect on 4 November
  2. As the deadline nears, the oil market is unusually calm
  3. The Organization of the Petroleum Exporting Countries (OPEC) crude price basket went down by 8.6 %, while the Brent benchmark fell by 9.4 % during the month

Effect on the economy of India as well as other countries

  1. For most of the consuming countries, it is not simply a question of finding replacement oil
  2. Crude import has to be at prices they can afford
  3. The price has already gone up
  4. The increase in oil prices is not only due to the impact of sanctions against Iran but is also driven by policies pursued by Opec and non-Opec producers to restrict crude oil production to keep the prices high
  5. The Indian crude oil basket is up by nearly 30% since last year, which would add more than ₹2 trillion to our annual oil import bill if the trend persists
  6. If rupee depreciation is factored in, the effect will be even more pronounced

Connectivity problem

  1. There are also issues of connectivity and trade with Afghanistan and Central Asia
  2. Seen against the background of worsening situation in the Af-Pak region, this factor assumes added importance
  3. India is committed to develop Chabahar Port which is in no way linked to Iran’s oil exports, which go through the Kharg terminal in the Gulf
  4. Apart from Chabahar, India also has interest in the International North-South Transit Corridor (INSTC), which runs through Iran
  5. This will improve connectivity with five Central Asian republics

Sanctions are not universal

  1. This round of sanctions is different, as it is not supported by the European Union and the United Nations
  2. Germany, France, the UK along with China and Russia continue to support the nuclear deal
  3. Iran’s compliance with the nuclear accord has been confirmed by the International Atomic Energy Agency (IAEA)
  4. The International Court of Justice (ICJ) has also ruled against the US sanctions

Options for India

  1. During the last round of sanctions against Iran, a rupee payment arrangement was evolved
  2. This involved making 45% of oil payments in rupees, which were utilized to cover Indian exports to Iran
  3. During the last round of sanctions, India reduced its crude import from Iran from 21 million to 10 million tonnes per annum
  4. For India, the only option that remains is reviving rupee payment arrangement to bring down current account deficit, and ensure continuity in Indian exports, which are largely limited to food and pharmaceuticals

Way forward

  1. India has an extremely important and growing relationship with the US
  2. It also has geopolitical compulsions, and an age-old relationship with Iran as well as its Arab neighbours
  3. India needs to maintain a fine balance between the two

Iran’s Nuclear Program & Western Sanctions

Signs of mistrust in Iran-American N Deal?

  1. Iran’s top leader, Ayatollah Ali Khamenei says it is futile to engage with the Americans, cautions against talks with Washington on other regional issues
  2. Despite the lifting of nuclear-related sanctions, Iran is still barred from using the US’ financial system because of many other prohibitions
  3. This caused delay in Iran’s purchases of new jetliners from Boeing and Airbus, which the nuclear agreement specifically permitted
  4. Trivia: Mr. Trump had called the nuclear agreement a disaster, suggesting that he would seek to renegotiate it
  5. Wonder what happens if he gets to ascend the throne!

Iran’s Nuclear Program & Western Sanctions

Missiles for self defence, tests do not violate nuclear deal: Iran

  1. Context: Recently, Iran test fired ballistic missiles, supposedly to be for self defence
  2. The tests drew international concern and prompted a meeting of the 15-nation Security Council
  3. Statement: The ballistic missiles were for self-defense and recent tests did not violate the historic nuclear deal between Iran and six world powers
  4. Also, the missiles tested would never be used in aggression
  1. Context: Recently, Iran test fired ballistic missiles, supposedly to be for self defence
  2. The tests drew international concern and prompted a meeting of the 15-nation Security Council
  3. Statement: The ballistic missiles were for self-defense and recent tests did not violate the historic nuclear deal between Iran and six world powers
  4. Also, the missiles tested would never be used in aggression

Iran’s Nuclear Program & Western Sanctions

Israel demands world powers punish Iran for missile tests

  1. Why? because, Iran test-fired 2 ballistic missiles emblazoned with the phrase Israel must be wiped out in Hebrew
  2. Context: U.N. Secretary-General Ban Ki-moon called on Iran to act with moderation, and U.S. ambassador to U.N. said the launches were provocative and destabilizing
  3. Iran’s stand: Missile tests do not violate Iran’s nuclear deal with world powers or U.N. Security Council resolutions
  4. UN Security Council resolution: Last year removing sanctions called on Iran not to undertake any activity related to ballistic missiles designed to deliver a nuclear weapon
  5. Israel demands: world powers had pledged to prevent Iran from such violations, so they should act on it
  1. Why? because, Iran test-fired 2 ballistic missiles emblazoned with the phrase Israel must be wiped out in Hebrew
  2. Context: U.N. Secretary-General Ban Ki-moon called on Iran to act with moderation, and U.S. ambassador to U.N. said the launches were provocative and destabilizing
  3. Iran’s stand: Missile tests do not violate Iran’s nuclear deal with world powers or U.N. Security Council resolutions
  4. UN Security Council resolution: Last year removing sanctions called on Iran not to undertake any activity related to ballistic missiles designed to deliver a nuclear weapon
  5. Israel demands: world powers had pledged to prevent Iran from such violations, so they should act on it

Iran’s Nuclear Program & Western Sanctions

Normalising Iran

  1. Economic sanctions related to its nuclear programme — imposed by the US, EU and the UN — were lifted, following the IAEA’s confirmation of Tehran’s compliance with the terms of nuclear deal.
  2. But, Washington imposed fresh sanctions over Iran’s missile programme, pertaining to the test-fire of a precision-guided ballistic missile.
  3. US has only suspended its nuclear-related sanctions; it hasn’t terminated them.
  4. Non-nuclear economic sanctions imposed by the US remain in place, forbidding American citizens and firms from trading with Iran.
  5. All said and done, Iran is now back in the global market, ready to raise its production and export of oil, gain access to capital and investment.
  6. As India’s gateway to Central Asia, Iran is also a promising investment destination for India’s private sector in infrastructure, IT, petrochemicals, etc.
  7. As Other Asian economies, like China and Japan, rush in, India must move swiftly.

Tehran’s readmission to the world market offers opportunities Delhi must seize.

  1. Economic sanctions related to its nuclear programme — imposed by the US, EU and the UN — were lifted, following the IAEA’s confirmation of Tehran’s compliance with the terms of nuclear deal.
  2. But, Washington imposed fresh sanctions over Iran’s missile programme, pertaining to the test-fire of a precision-guided ballistic missile.
  3. US has only suspended its nuclear-related sanctions; it hasn’t terminated them.
  4. Non-nuclear economic sanctions imposed by the US remain in place, forbidding American citizens and firms from trading with Iran.
  5. All said and done, Iran is now back in the global market, ready to raise its production and export of oil, gain access to capital and investment.
  6. As India’s gateway to Central Asia, Iran is also a promising investment destination for India’s private sector in infrastructure, IT, petrochemicals, etc.
  7. As Other Asian economies, like China and Japan, rush in, India must move swiftly.

Iran’s Nuclear Program & Western Sanctions

U.S. lifts sanctions; Iran comes in from the cold

  1. US removed a wide range of sanctions against Iran after International Atomic Energy Agency (IAEA) confirmed that Tehran has met its commitments to roll back its nuclear programme.
  2. The U.S has only removed secondary sanctions that restrict the dealings of other countries with Iran.
  3. The removal of restrictions on its oil, petrochemicals, banking, natural gas and port sectors will hugely benefit Iran and allow it to reenter the global market.
  4. This also help India’s plans in Iran, include the Chabahar port, an Indian Oil petrochemical plant and the proposed Iran–Pakistan–India (IPI) gas pipeline.

Primary sanctions that bar U.S citizens and companies from business with Iran will remain.

  1. US removed a wide range of sanctions against Iran after International Atomic Energy Agency (IAEA) confirmed that Tehran has met its commitments to roll back its nuclear programme.
  2. The U.S has only removed secondary sanctions that restrict the dealings of other countries with Iran.
  3. The removal of restrictions on its oil, petrochemicals, banking, natural gas and port sectors will hugely benefit Iran and allow it to reenter the global market.
  4. This also help India’s plans in Iran, include the Chabahar port, an Indian Oil petrochemical plant and the proposed Iran–Pakistan–India (IPI) gas pipeline.

Iran’s Nuclear Program & Western Sanctions

U.S.-Iran tensions on the rise again

  1. Iran’s President has warned of reprisals if Washington resorts to further sanctions.
  2. This could jeopardise a hard-won nuclear deal due to be finally implemented within weeks.
  3. U.S. Treasury Department had planned to blacklist companies and individuals with ties to Iran’s ballistic missile programme.
  4. Since the nuclear deal was struck, U.S. officials say Iran has conducted two missile tests.
  5. The tests breached previous resolutions aimed at stopping Iran from developing missiles capable of carrying a nuclear warhead.

Iran’s President has warned of reprisals if Washington resorts to further sanctions.

  1. This could jeopardise a hard-won nuclear deal due to be finally implemented within weeks.
  2. U.S. Treasury Department had planned to blacklist companies and individuals with ties to Iran’s ballistic missile programme.
  3. Since the nuclear deal was struck, U.S. officials say Iran has conducted two missile tests.
  4. The tests breached previous resolutions aimed at stopping Iran from developing missiles capable of carrying a nuclear warhead.

Iran’s Nuclear Program & Western Sanctions

The Iran deal, a triumph for diplomacy

  1. US and Iran were pressed by political, economic and geopolitical factors to reach a comprehensive solutions to deep-rooted crises.
  2. Obama could not take forward Bush administration’s aggressive strategy against Iran due to the economic crisis that hit the world.
  3. US faced daunting challenges in Asia after 9/11, i.e. stabilising Iraq and Afghanistan, neutralising terror groups operating from within the region and dealing with Iran.
  4. It was the confluence of strategic interest in Iraq and Afghanistan and US’ need for an ally in the region to tackle IS, which led to Iran’s shift from spoiler power to stabilising power.

 

  1. US and Iran were pressed by political, economic and geopolitical factors to reach a comprehensive solutions to deep-rooted crises.
  2. Obama could not take forward Bush administration’s aggressive strategy against Iran due to the economic crisis that hit the world.
  3. US faced daunting challenges in Asia after 9/11, i.e. stabilising Iraq and Afghanistan, neutralising terror groups operating from within the region and dealing with Iran.
  4. It was the confluence of strategic interest in Iraq and Afghanistan and US’ need for an ally in the region to tackle IS, which led to Iran’s shift from spoiler power to stabilising power.

Iran’s Nuclear Program & Western Sanctions

U.N. endorses Iran nuclear agreement

  1. UNSC unanimously endorsed the Iran – P5+1 nuclear deal agreement, paving the way for terminating sanctions against Iran.
  2. This move will boost the economy of Iran which was crippling under harsh sanctions imposed on it since 2006.
  1. UNSC unanimously endorsed the Iran – P5+1 nuclear deal agreement, paving the way for terminating sanctions against Iran.
  2. This move will boost the economy of Iran which was crippling under harsh sanctions imposed on it since 2006.

Iran’s Nuclear Program & Western Sanctions

Obama defends Iran nuclear deal, Israel declares it a big mistake

  1. President Obama said the Iran nuclear deal is the only way to avert a nuclear arms race in the Middle East and reduce chances of war.
  2. The deal announced on Tuesday offers to roll back economic sanctions on Iran if it scales down its nuclear program.
  3. Israel PM Netanyahu has called this move to amicably suppress Iran a mistake of historic proportions.
  1. President Obama said the Iran nuclear deal is the only way to avert a nuclear arms race in the Middle East and reduce chances of war.
  2. The deal announced on Tuesday offers to roll back economic sanctions on Iran if it scales down its nuclear program.
  3. Israel PM Netanyahu has called this move to amicably suppress Iran a mistake of historic proportions.

Iran’s Nuclear Program & Western Sanctions

Iran reaches historic nuclear deal

  1. The deal puts strict limits on Iran’s nuclear activities for at least a decade and calls for stringent U.N. oversight.
  2. The international arms embargo against Iran will remain for five years but deliveries would be possible with special permission of the UNSC.
  3. Sanctions had slashed Tehran’s oil exports by a quarter and choked its economy.
  1. The deal puts strict limits on Iran’s nuclear activities for at least a decade and calls for stringent U.N. oversight.
  2. The international arms embargo against Iran will remain for 5 years but deliveries would be possible with special permission of the UNSC.
  3. Sanctions had slashed Tehran’s oil exports by a quarter and choked its economy

Iran’s Nuclear Program & Western Sanctions

Big hurdles still remain in Iran n-talks

  1. The main differences are on the pace and timing of sanctions relief for Iran and on the nature of monitoring mechanisms to ensure Tehran does not cheat on any agreement.
  2. U.S. and European negotiators also want to ensure there is a mechanism for restoring sanctions if Tehran fails to meet its commitments under any future accord

 

  1. The main differences are on the pace and timing of sanctions relief for Iran and on the nature of monitoring mechanisms to ensure Tehran does not cheat on any agreement.
  2. U.S. and European negotiators also want to ensure there is a mechanism for restoring sanctions if Tehran fails to meet its commitments under any future accord

Iran’s Nuclear Program & Western Sanctions

The road from Lausanne

  1. The agreement has left many crucial details to be worked out in the next round of talks, including sequencing of sanctions-relief and details of inspection regime.
  2. Iran is expecting rapid relief on sanctions from UN and EU.
  3. US is looking for conclusive proof of Iranian compliance with the nuclear inspections and limiting Iran’s programme, before taking off sanctions.
  4. Israel has tried all efforts against this deal, which will later draw the international attention on the Israeli arsenal.
  5. If a deal is reached, it will significantly reduce the risk of further proliferation in the Middle East
  1. The Nuclear agreement has left many crucial details to be worked out in the next round of talks, including sequencing of sanctions-relief and details of inspection regime.
  2. Iran is expecting rapid relief on sanctions from UN and EU.
  3. US is looking for conclusive proof of Iranian compliance with the nuclear inspections and limiting Iran’s programme, before taking off sanctions.

  4. Israel has tried all efforts against this deal, which will later draw the international attention on the Israeli arsenal.
  5. If a deal is reached, it will significantly reduce the risk of further proliferation in the Middle East.

Iran’s Nuclear Program & Western Sanctions

Iran-P5+1 talks: Breakthrough

  1. Iran and P5+1 agreed on the framework for a draft plan of action that would be ready by June 30th this year.
  2. The draft plan envisages to limit Iran’s nuclear programme for civilian nuclear activities only.
  3. The plan of action clearly states the no. of enrichment plants and centrifuges Iran will have access to, as well as their verification by IAEA.
  4. The UN will terminate all its resolutions sanctioning Iran, which had crippled its economy.
  5. The breakthrough deal will have wider geopolitical repercussions on all of West Asia, which is witnessing the results of the proxy war between Iran and Saudi Arabia
  6. The deal will bring big relief for India, who found it difficult to strengthen its civilizational ties with Tehran in face of international sanctions.

 

Key Points:

  1. Iran and P5+1 agreed on the framework for a draft plan of action that would be ready by June 30th this year.
  2. The draft plan envisages to limit Iran’s nuclear programme for civilian nuclear activities only.
  3. The plan of action clearly states the no. of enrichment plants & centrifuges Iran will have access to, as well as their verification by IAEA.
  4. The UN will terminate all its resolutions sanctioning Iran, which had crippled its economy.
  5. The breakthrough deal will have wider geopolitical repercussions on all of West Asia, which is witnessing the results of the proxy war between Iran and Saudi Arabia
  6. The deal will bring big relief for India, who found it difficult to strengthen its civilizational ties with Tehran in face of international sanctions.
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