Implications of nuclear deal

Few developments have so significantly occupied international attention ever since the Iranian Revolution in 1979 as the hostility between Iran on the one hand and the US and Israel on the other. Tensions in US-Iran relations escalated when Iranian students supporting the Ayatollah Khomeini-led revolution attacked the US Embassy on November 4, 1979, taking 52 US diplomats hostage for 444 days. The students labelled their action as a "conquest of the American spy den". The students who engineered the hostage crisis painstakingly put together shredded documents which revealed the extent of CIA interference in Iran's domestic affairs. The US had turned a blind eye and tacitly condoned the atrocities of the Shah's intelligence services (SAVAK). The Khomeini dispensation viewed Israel's role similarly.

Relations continued to deteriorate with the Iranians calling the US as the “Great Satan” and vowing to eliminate Israel. The US labelled Iran as constituting an “Axis of Evil”.  Covert operations fomenting violence were undertaken extensively by all concerned.  The intensity of these operations increased after Iran commenced obtaining nuclear weapons capabilities, primarily through uranium enrichment with crucial assistance from Pakistan’s Dr A.Q. Khan.  President Obama had reportedly expressed concern about Israeli involvement in the killing of five Iranian nuclear scientists. Iran responded with attacks on Israeli missions in countries ranging from Argentina and Azerbaijan to India and Thailand. The US contributed by actions like injecting a “Stuxnet” virus to disable Iran's enrichment programme. Saudi Arabia and Iran have fought proxy battles across the Islamic world, most notably in Iraq, Syria and Yemen. “Cut off the head of the snake (Iran),” King Abdullah advised General David Petraeus.

The US has spared no effort to scuttle Iran's nuclear programme. The UN Security Council passed ten resolutions against Iran involving banking sanctions, freeze of financial assets, travel restrictions on sanctioned persons, freezing of assets of the Iranian Revolutionary Guard and banning all missile and nuclear related cooperation. These resolutions were accompanied by stringent banking, insurance, shipping and other sanctions imposed by the US and European Union, crippling energy related cooperation with Iran, especially with major partners like China, Japan, South Korea and India. Within two years of the tightening of the global sanctions regime in 2011, Iranian oil exports fell from 2.2 million barrels per day (bpd) to a mere 700,000 bpd, with Iran's economy actually shrinking by 5.5 per cent. This trend has continued. Despite these sanctions, Iran has expanded its influence across its neighbourhood, challenging Saudi-US policies effectively in Syria, while finding itself on the same side as the Americans in confronting the ISIL challenge in Iraq.

While the Obama Administration recognised that an adversarial Iran will be a thorn in its flesh, if things are not sorted out, the Iranians realised that their larger national interests are better served by accommodation on the nuclear issue, which is not perceived as surrender. The broad parameters of the framework agreed upon recently in Lausanne meet these requirements. Iran has agreed to restrict its uranium enrichment 3.67% — adequate for civilian use, but well below the weapons grade. It has installed 19,000 centrifuges for enrichment, with a round 10,000 currently in use. Under the deal only 5,060 of these will be used for the next ten years. One of its underground enrichment facilities located at Fordow will stop all enrichment for 15 years. There will be similar restrictions on Iran’s only Plutonium reactor. Iran will also have to limit its research and development activities in manner that precludes quick weaponisation and grant access for comprehensive inspections of its nuclear activities by the IAEA.

In return for the restrictions that Iran has agreed to, the US and other Permanent Members of the Security Council together with the members of the European Union will lift nuclear related sanctions on Iran. This would bring huge relief to Iran and lead to a restoration of its oil sales and promote investments in its vital oil and gas sectors. While the framework for the nuclear deal has been agreed upon, the exact sequencing of maintaining restrictions on Iran and the lifting of sanctions still remains to be finalised. This is not going to be an easy task, but will have to be completed by June 30 if further sanctions proposed by the US Senate Banking Committee are to be pre-empted. President Obama is going to have a very difficult time getting these proposals endorsed by the US Senate, where the Republican majority and even quite a few in his own Democratic Party remain implacably hostile. On the other hand, he would like to see the ending of sanctions on Cuba and Iran that he has wisely promoted as a “legacy” of his Presidency.

Israeli Prime Minister Benjamin Netanyahu has emerged as the most formidable opponent of the proposed nuclear deal, claiming that its adoption would set the stage for the destruction of Israel by a nuclear Iran. Netanyahu enjoys the support of not only powerful Jewish groups in the US, but also the support of Sunni Arab countries led by Saudi Arabia. Interestingly, what we are now witnessing is the strengthening of a Saudi-led, Egyptian-backed grouping of Sunni Islamic countries, working in tandem with Israel, to curb Iranian influence. The irony of this situation is accentuated by the fact that several members of the Israeli security establishment do not share Netanyahu's dire forebodings about the Iran nuclear deal. Israel is estimated to possess an arsenal of around 200 nuclear weapons. It strains one's credulity how a hypothetical Iranian arsenal of a few nuclear weapons, after three decades, can dare to pose a threat to a country with capabilities to develop a nuclear triad with formidable second-strike capabilities.

The end of sanctions against Iran will benefit India significantly. It will substantially boost our exports of refined petroleum products and open the doors for investments in Iran’s oil and natural gas sector, with prospects for an undersea gas pipeline. A normalisation of Iran-US relations will also clear the deck for dealing jointly with Taliban style extremism and terrorism across our western borders.

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