New Delhi: Donald Trump on Tuesday announced that the US would be pulling out of the Obama-era Iran nuclear deal, throwing into disarray its relationship with many of its allies.
On its part, Iran said that the agreement, known as the Joint Comprehensive Plan of Action (JCPOA), will continue to exist between Iran and five other countries, namely Russia, China, Germany, France and Britain.
Despite the tumultuous ties between Iran and the US, India has so far, continued to support the deal and has repeatedly called the deal a diplomatic triumph.
The position was reaffirmed when Iranian president Hassan Rouhani visited India earlier this year. “The Indian side reaffirmed its support for JCPOA… a crucial contribution to the non-proliferation framework, international peace, stability and security,” the joint statement by the two countries read.
With the US pulling out of the agreement and saying that it will ensure sanctions are in place, Iran’s oil exports are likely to take a hit. Iran’s oil exports might reportedly take a hit of almost 5,00,000 barrels a day within a few months. This would be enough to increase global oil prices and the effect will trickle down to India, one of Iran’s biggest oil customers. As of December 2017, Iraq was India’s largest supplier, followed by Saudi Arabia and Iran.
In 2016, India lined up $20 billion as investment in oil and gas as well as petrochemical and fertiliser projects in the Persian Gulf country subject to provision of concessional rights.
Further, the hit on Iran’s crude exports will fuel tensions in Middle East, home to one third of the world’s oil suppliers.
Other than oil needs, Iran and India have strong ties when it comes to the regional space, something that India would look into before it draws any conclusion on the US pull-out. India has committed millions of dollars to building the Chabahar port that connects India and Afghanistan. The port is an important gateway for India into central Asia, as China simultaneously ups its game by building a port at Gwadar in Pakistan.
With US President Donald Trump getting support from Saudi Arabia and Israel over his decision, India will have to keep in mind how its investments in Iran play out with other major allies, especially Israel.