This appeared in CNBCTV18 a few weeks ago. 

Iran and the United States of America have had a rather tumultuous relationship for the best part of seven decades. In the 1950’s there were two major upheavals. The first was the nationalisation of oil by the Iranian government, that moved the resource from the controls of the Anglo Iranian Oil Company – the forerunner of British Petroleum – to the state. The second was a CIA funded coup in 1953, to replace the democratically elected Prime Minister of Iran, Mohammad Mosaddegh  and replace him with the more pliant Reza Pahlavi as the Shah of Iran. The Shah ran a ruthless regime, that was despised by the masses. But, it found favour with his supporters in the West, so much so they backed the Iranian nuclear programme in the 1950’s. As the regime got closer to the west, it also alienated the citizens of Iran, with a repressive regime.  The discontent was tapped by an elderly cleric Ayatollah Khomeini who led an Islamic revolution to overthrow the Shah, in 1979, and establish the Islamic Republic of Iran.

For the new regime, the United States was the great Satan. And, for the United States the Iranian Government was a rogue state that had to be contained. This cold war has gone on for almost 40 years. To complicate it further, Iran is the driving force behind the Shia Muslim movement, and is at loggerheads with its predominantly Sunni neighbours, especially Saudi Arabia.  

Exacerbating this already complex scenario, was Iran’s nuclear programme, that it claimed was peaceful purposes. This nuclear programme attracted the ire of the west, and Iran has faced massive trade sanctions from the United States and its allies.  The rest of the world also faced problems trading with Iran. The 2015 Iran Nuclear deal went a long way in reducing the tensions between Iran and the West, and consequently trade sanctions were relaxed, and commerce became relatively easier. And, then the United States of America elected Donald Trump.

Mr Trump is not known for his diplomacy. He has been hard on his allies. He accused the Canadian Prime Minister of making a ‘false statement’, told the British press that Boris Johnson would make a great British Prime Minister said Mrs May, the current Prime Minister did not listen to his advice on Brexit. Mrs Merkel invariably ends up looking exasperated each time she is photographed with Mr Trump. He has attacked China on twitter, got a conversation with the Australian PM mixed up, breached protocol, and upended the international system. And, thus far it has only been friends that he has tried bulldozing. Now it is the turn of foes.

Iran has been in Trump’s cross hairs for a long time.  He came into power promising to renegotiate the nuclear deal, and has been true to his word, withdrawing America from the deal. Now, he has turned his attention to trade, and the imposition of sanctions on Iran, that were done away with in 2015. Not only that, the Trump administration has unequivocally stated that it will impose sanctions on non US companies and independent nations that continue to trade with Iran. This has serious implications for India.

Since 2015, India and Iran have expanded trade ties. India is helping develop the Chabahar port in Iran that would provide India access to Afghanistan and Russia. Strategically, the port is of vital importance to India, not just for trade, but for expanding and maintaining a sphere of influence. Also, the relationship with Iran, helps India counter balance Pakistan’s influence in its western neighbourhood. Iran is the second largest supplier of oil to India, surpassing Saudi Arabia. This is a relationship that works very well for India, because Iran allows India to pay for the oil in Rupees. All this is in jeopardy, because Mr Trump wants to impose his will on the whole world.

India needs to protect her interests in West Asia, and her access to Afghanistan and beyond. China is already spreading her influence in the region, and the Chabahar port is the gateway to our regional ambitions.  This is our immediate neighbourhood and fills our growing need for energy. At the same time, a rampaging Trump must be contained. India needs to ally with the EU, China, and Japan – all of who are in Trump’s cross hairs for trading with Iran – and make sure we do not end up kowtowing to American will. Mr Modi’s government must stand friendly but firm on this issue. India must protect her long-term interests in the region, not the short term interests of an American leader.