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Iranian Deal, US pull out & its implications for India


  • G.S. Paper 2,3

Why in news?

  • The U.S. pulled out of the “Iranian Nuclear Deal”.
  • The move seems directed more towards bringing in a regime change than towards curtailing Iran’s nuclear ambitions.

What is Iranian Nuclear Deal (JCPOA)?

  • Joint Comprehensive Plan of Action (JCPOA) was a deal negotiated between “Iran and P5+1 Countries” during the Obama era in 2015.
  • P5+1 are the permanent five in UN Security Council (US, UK, France, Russia and China) and Germany.
  • The deal curtailed Iran’s uranium enrichment program, and opened up Iran’s nuclear facilities to international inspection.
  • The safeguards placed in the deal would have effectively deterred Iran’s touted Nuclear Weapons Program by at least a decade.
  • The deal was commended worldwide and there is currently every indication that Iran has strictly complied to it in letter and spirit.
  • But despite all these, the Trump administration unilaterally terminated JCPOA, with the allegation that deal was one sided and serves no purpose.

What led to the dismissal of the deal?   

  • Two key US allies “Israel and Saudi Arabia” were very apprehensive of the 2015 Iranian Deal as it would lift the sanction on Iran.
  • Once sanctions are removed, there is every possibility that Iran would emerge as a economic power in the region – which they perceive as a threat.
  • Notably, provocative statements from the Iranian political dispensation over the years have convinced Israelis and Saudis to take a hard line against Iran.
  • A regime change is what they desire and Trump has largely pandered these aspirations even in his campaign trail in the run up to presidency.

What is the social situation in Iran?

  • Western media has been reporting frequent and large-scale demonstrations by Iranian people against the regime in recent months.
  • There are reports that the JCPOA hasn’t helped Iranian economy recover as fast as expected as many sanctions still persist, thereby making life difficult.
  • Inflation is high and economic inequality has only been getting worse, and these are only compounded by reports of massive corruption.
  • Religious faith is also said to be on the decline (reduced attendance at Mosques), which doesn’t spell good for a “Shiite theocracy” like Iran.
  • Notably, conversion to Christianity and, even to the Baha’i faith, which is the largest non-Muslim community in Iran has been noted.
  • While all of these suggest that a revolutionary upsurge, analysts’ have not been able to establish a possible timeline for such an occurrence.
  • US, Saudi and Israel are hoping to aid the build-up of this discontent by wanting a re-imposition of sanctions.
  • Such a move would further curtail Iranian economy and thereby help in enhancing public anger and frustration against the Iranian regime.
  • Hence, Trump is unlikely to listen to other stakeholders in JCPOA, who’ve vouched for the continuance of the deal.

How has the Iranian Government reacted to this?

  • Iran has shown restraint for now and hasn’t called off the deal yet and has announced that it won’t enhance its uranium enrichment program for now.
  • It has also not called off the “International Atomic Energy Agency” (IAEA) inspections, which is mandated by JCPOA.
  • The regime has shown considerable maturity by stating that it would consult the other signatories before taking a call on further course of action.
  • As the US might put up the pressure on the other signatories to ditch the deal, it remains to be seen on how many of them will be willing to defy Trump.
  • Notably, Trump has his Republican Party strongly behind him on the Iranian issue and the Democrats are presently a divided house.

What are the international political implications?

  • US pullout has strengthened the hardliners and hence, current Iranian President Rouhani (a moderate) has no option but to take a defiant stance.
  • Iranians are proud of their heritage, and will stand behind their regime for now, but if their economic hardships escalate things might get tricky.
  • In the meanwhile, Iran will even more vigorously support the Bashar al-Assad regime in Damascus, in which it will be joined by Russia and Hezbollah.
  • Also, the Houthi rebels (Iranian allies) in Yemen will feel more emboldened to take on the Saudi-led coalition – which will make the Yemeni war worse.
  • Iran will also more directly intervene in Iraq and render the possibility of peace in Afghanistan even more difficult.

How is it going to affect India?

  • Despite India’s strengthening ties with Israel and US, India has given out a diplomatic statement disapproving US withdrawal from JCPOA.
  • Sanctions on Iran will impact India’s crude import bills, which is already strained due to increase in international oil prices (currently $80/barrel).
  • Notably, Iran is one of India’s major crude exporters.
  • India’s Chabahar project might also suffer some setbacks, which will result in business losses and also alienate Afghanistan (connectivity) from India.
  • Domestically, RBI will have to shell out its Forex to curtail and rupee depreciation and inflation (which are expected fallouts).
  • All this could slow the Indian economy – which would also prove costly for the government, which is heading towards elections in a while.

US-Europe & the Iran Nuclear Deal


  • G.S. Paper 2

Why in news?

  • The United States pulled out of the Iran nuclear deal.
  • This decision has complicated relations of US with EU and Britain.

How do EU and Britain see this withdrawal?

  • Britain is against the complete withdrawal of US from the nuclear deal with Iran.
  • It wants the US to work with its European allies.
  • It is of the opinion solutions to what US describes as flaws should be sought.
  • It prefers working around the existing deal rather than rejecting it outright.
  • France and Germany also seem to be taking a similar stance.
  • In a joint statement, the leaders of Britain, France and Germany emphasised their continuing commitment to the JCPOA.

What makes the deal significant for European countries?

  • Europe always had strong ties with Iran.
  • It had been Iran’s largest trading partner until the sanctions regime (2006 – 2010).
  • This role was however overtaken by China and the UAE.
  • The EU currently accounts for just around 6% of Iran’s trade.
  • But trade and investment had begun to recover swiftly since the 2015.
  • The deal with Iran and lifting of sanctions significantly contributed to this.
  • European firms have entered into investments in Iran.
  • European countries are thus particular in saving the deal in some form with Iran.

What makes US crucial for Europe?

  • Britain has made plain eagerness to maintain strong ties with the US.
  • It is particular of a comprehensive trade deal with the US.
  • This is seen as one of the great deals for a post-Brexit Britain.
  • European countries have adopted an accommodating stance towards the US in the past.
  • It has received some special treatments from the US, in return, in the past.
  • g. exemptions (temporarily) accorded to Europe from the US global tariffs on aluminium and steel products.

What is the way forward?

  • Europe has presented a united front so far. It remains to be seen if this would continue with developments in the Iran issue.
  • Iran had indicated that Europe had “limited opportunity” to preserve the deal.
  • It has emphasized that the countries clarify their position and intentions.
  • This will inevitably force European countries to reassess their approach to the US administration.

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