Indian Prime Minister Narendra Modi with the President of the Islamic Republic of Iran, Hassan Rouhani, in New Delhi on February 17, 2018. (Photograph: PIB)

What Trump’s Pullout From The Iran Deal Means For South Asia

U.S. President Donald Trump’s decision to withdraw from the nuclear deal with Iran poses immediate risks to the NATO alliance, to stability in the Middle East, and to the global non-proliferation regime.

It also has significant, and deleterious, implications for South Asia.

New Delhi In A Tough Spot

India now finds itself in an immediate diplomatic pickle: It must figure out how to maintain its important economic relations with Tehran while not jeopardizing its rapidly deepening ties with Washington.

Iran is a critical energy partner for India.

Last year, Tehran was New Delhi’s third-largest oil supplier.

India plans to double its natural gas use by 2022, which makes Iran’s bountiful natural gas supplies all the more attractive — particularly with India’s access to gas-rich Central Asia hampered by security problems in Afghanistan and by a lack of transit trade rights in Pakistan.

Washington’s new sanctions on Tehran will complicate New Delhi’s ability to do business with Iran — at a time when India has never been keener to work with Tehran. Recall that New Delhi recently concluded a deal with Tehran to develop a transport corridor project stretching from the Chabahar port in southern Iran into Afghanistan.

Indian Prime Minister Narendra Modi and the President of the Islamic Republic of Iran,  Hassan Rouhani witnessing the exchange of an MoU, between Foreign Ministers Mohammad Javad Zarif and Sushma Swaraj, in New Delhi on February 17, 2018. (Photograph: PIB)
Indian Prime Minister Narendra Modi and the President of the Islamic Republic of Iran, Hassan Rouhani witnessing the exchange of an MoU, between Foreign Ministers Mohammad Javad Zarif and Sushma Swaraj, in New Delhi on February 17, 2018. (Photograph: PIB)

Also Read: Iran Plans First Foreign Oil Pact Since Trump Left Nuclear Deal

The Modi government will need to execute a delicate diplomatic dance to maintain cordial relations with both Tehran and Washington.

Given its proven ability to carry out other successful diplomatic balancing acts—witness its solid relations with the Israelis and the Palestinians—there’s reason to believe New Delhi will figure out a way to pull off the right moves.

But it won’t be easy.

Good And Bad News for Islamabad

These challenges for India represent a net benefit for Pakistan. Additionally, new sanctions on Tehran are less problematic for Islamabad than they are for New Delhi. Pakistan’s deteriorating relationship with America means it will be less worried than India will be about the implications of flouting the new U.S. sanctions regime on Iran.

Additionally, if India pulls back from Iran, Tehran could cultivate deeper economic relations with Islamabad; the two sides have already indicated a desire to strengthen trade ties. Tehran may even explore the possibility of contributing to the China-Pakistan Economic Corridor, a connectivity project staunchly opposed by New Delhi.

However, any moves toward increased Pakistan-Iran ties will worry Saudi Arabia, Islamabad’s longstanding ally, and Tehran’s bitter rival.
Pakistan Prime Minister Shahid Khaqan Abbasi and Saudi Crown Prince Muhammad bin Salman discuss bilateral ties, regional situation at a meeting in Jeddah, on August 23, 2017. (Photograph: Govt of Pakistan‏/Twitter)
Pakistan Prime Minister Shahid Khaqan Abbasi and Saudi Crown Prince Muhammad bin Salman discuss bilateral ties, regional situation at a meeting in Jeddah, on August 23, 2017. (Photograph: Govt of Pakistan‏/Twitter)

Also Read: EU Acts to Counter U.S. Sanctions on Iran, Preserve Nuclear Deal

Additionally, more broadly, Trump’s withdrawal from the Iran deal—a decision that had resounding Saudi support—will sharpen an already-intensifying regional rivalry between Riyadh and Tehran. And Pakistan could get caught in the middle.

The Saudis could pressure Pakistan to prove its continued commitment to Riyadh, perhaps by asking for troop contributions—a request Pakistan has granted previously. Meanwhile, the Iranians could dangle enticing energy deals to try to wean Pakistan, even if only modestly, away from Riyadh. For Islamabad, the stakes of intensifying Saudi-Iranian rivalry are high. Pakistan shares a border with Iran, and Tehran alleges that anti-Iran rebels supported by Riyadh are present on the Pakistani side of the border.

The possibility of Saudi-Iranian proxy conflict poses a direct security risk for Pakistan. 

Another Destabilisation Risk For Afghanistan

Trump’s decision to jettison the Iran deal could prompt dangerous Iranian retaliations, most of them in the Middle East. These may include attacks on Israeli targets and stepped-up support for proxies such as Hezbollah. However, Tehran could also retaliate by ramping up support to the Taliban in Afghanistan.

Such a scenario—Shia Iran cooperating with a Sunni extremist group—is not as far-fetched as it may seem.

Tehran and the Taliban, united in their opposition to the U.S. military presence in Afghanistan, have already forged some diplomatic and military cooperation.
Afghan National Army soldiers from the 209th Corps stand for a review by commanding officers on their base in Mazar-i-Sharif, Afghanistan. (Photographer: Victor J. Blue/Bloomberg)
Afghan National Army soldiers from the 209th Corps stand for a review by commanding officers on their base in Mazar-i-Sharif, Afghanistan. (Photographer: Victor J. Blue/Bloomberg)

The Taliban opened an office in Iran in 2012, and it’s worth recalling that when Taliban leader Mullah Mansour was droned in Baluchistan, Pakistan, in 2016, he was returning from a visit to Iran. Meanwhile, Tehran has sent shipments of small arms to the Taliban. According to senior Afghan officials, Tehran is also providing military training to some Taliban units in Iran.

For Tehran, intensifying its backing of the Taliban would be a relatively cost-free way of undercutting Washington. Indeed, by bolstering America’s top nemesis in Afghanistan, the Taliban could deliver another blow to an already-faltering U.S. war effort.

Trump’s decision to walk away from the Iran deal is freighted with far-reaching implications that go beyond the Middle East. Not only is the move of great consequence for South Asia, but it also risks undercutting the Trump administration’s strategy there.

Indeed, Washington aims to strengthen its ever-growing ties with New Delhi and to weaken a Taliban insurgency that’s arguably never been stronger.

Scuttling the Iran deal puts India in a tough spot and provides Iran with a perfect pretext to cozy up to the Taliban.

As President Trump might say in one of his tweets: Not good.

Michael Kugelman is deputy director for the Asia Program and senior associate for South Asia at the Woodrow Wilson International Center for Scholars in Washington, DC.

The views expressed here are those of the author’s and do not necessarily represent the views of BloombergQuint or its editorial team.

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