Playing the Balancing Act

Bombardment, barrage, curtain-fire, mines, gas, tanks, machine-guns, hand-grenades – words, words, but they hold the horror of the world.

Erich Maria Remarque

Rising tensions between Iran and United States of America have plummeted the middle-east into yet another turmoil. Over the past week, the two countries have been at each other’s throats. The American embassy in Baghdad was attacked by Iranian outfits who operate in Iraq. In retaliation, the United States carried out a targeted drone strike against one of Iran’s top military leaders, Major General Qasem Soleimani. Yesterday, Iran launched missile strikes on two American military bases located inside Iraq as revenge for the assassination.

The matter has escalated to the brink of war between the two nations as none seems to be backing down.

There is a possibility that India, if not directly involved; will get affected by this conflict economically as well as geo-politically. Iran and the United States both have grown to become close partners of India. In this context, it is essential that India tread carefully as both nations are crucial for India’s future.

Indo-Iranian Relations

Indo-Iranian relations were established way back in the 1950s during the cold war era. Though at the onset these relations were not friendly due to their antagonistic alignments (India leaned to the Soviet Union, whereas Iran was close to the United States of America), it picked up in 1990s when they came together to oppose the Taliban regime in Afghanistan. In 2017-18, trade between the two countries amounted to US $13.76 billion.

Moreover, Iran is one of India’s primary sources of crude oil. 40% of the demand for crude oil is met through these imports. The Iranian government also accepts payments in the Indian Rupees (INR) instead of the United States Dollar (USD). This helps the Indian government from spending its FOREX reserves. Crude oil purchase is one of the top expenditures of the Indian government.

For Iran, India is essential for its infrastructural development projects. A significant example is that of the Chabahar Port which is being developed by India. Since the break-out of this conflict, India has been skeptical about continuing its investment into such projects which are necessary for developing the stressed Iranian economy.

Thousands of Iranian students study in Indian educational institutions. Every year approximately 40,000 Iranians visit India for business, tourism etc.

Indo-American Relations

The relationship between America and India has not always been cordial as they are now. In the beginning i.e. during the ‘Cold War‘ the two nations were not on good terms. This was mostly because of India’s alignment towards U.S.S.R. and its socialist nature of government and the United States’ backing of Pakistan, an all-time adversary of India.

Diplomatic relations are dynamic and keep changing with time.

In the 1990s, with the end of the cold war and the disintegration of the Soviet Union. A new perspective opened up in their relations. The Indian foreign policy was also adjusted to the new unipolar setting of global politics. Establishing closer ties with the United States.

The emerging Indian market is essential for US trade interests. India is hurtling towards becoming a $5 trillion economy. As more people get jobs and higher purchasing power, industries in US will be looking towards India to expand their businesses and earn more profit. On the other hand, India can use American expertise for meeting its key energy demands for the rapidly expanding industrial sector.

The two countries share a trading partnership which amounts to almost $87.9 billion; India exported $54.3 billion worth of goods and services and the US exported $33.5 billion. Despite the trade deficit, the two nations share this important relation which creates employment opportunities for thousands of civilians in both the countries.

In summary, the relationship is strategically important for both nations. Neither of them can risk losing the other as a partner.

Playing, the balancing act

Having put into perspective the relationship which India shares with USA & Iran, it is undeniable that the country is walking on eggshells. It cannot afford to lose either of them as it could put its future at risk.

India needs to play the role of a mediator and ensure that the situation does not develop into a full-blown war. An unstable middle-east is not only bad for the region itself, it can prove detrimental to Indian economic and political interests.

As mentioned above, India is heavily dependent on Iranian supply of crude oil. A rise in the import bill is not desirable to the economy which is already moving at a snail’s pace. Politically, India will temporarily lose importance in the eyes of the U.S. as the latter considers Pakistan to be of more value due to its common boundary with Iran.

India has called for de-escalation. It needs to pursue it actively. Sharing close ties with both of these countries makes it the ideal candidate for ensuring peace between them. The Ministry of External Affairs needs to bring both parties to the table and have this issue sorted out via discussions and talks. Skirmishes and war cannot be the solution. The loss of human lives in this conflict absolutely cannot justify the political mileage gained out of doing so.

Let us hope that in the coming days, the matter will play out to a peaceful resolution. Let it become an ideal example of how conflicts can be de-escalated to disagreements in meeting rooms and discussion forums and not remain violent battlefields. India needs to take this opportunity and step-up as a regional power and maintain stability in this part of the world. It needs to act as the superpower it wishes to become.

Priyamvad Rai

Disclaimer: Views expressed by the author are personal. TheMusing.in is a platform for people to express their opinion subject to veracity of facts. 

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One comment

  1. It is not a desirable situation prevailing in middle East region. Yes it’s true that Iran and India have maintained a very good relationship for years and the same should not go wrong at all. Another risk is that if India does not react positively to the prevailing situation then there is a possibility of China becoming a good friend of Iran and the same may not be good for India from geo-politics point of view.
    It’s time for India to act swiftly in the matter and take all efforts in de-escalating the war like situation.
    Good article and informative too. I did not know the trade data…

    Like

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