Adapting India, Accommodating United States: A Case of Iranian Sanctions

In the last decade India has firmly maintained its opposition to unilateral sanctions on several occasions. Recently, however, when White House Press Secretary Josh Earnest acknowledged India’s “substantial sacrifice” in implementing U.S. sanctions against Iran, New Delhi’s resistance to unilateral sanctions appeared shallow. India’s opposition as well as contended support to the sanctions cannot be understood without taking into account Washington’s efforts to garner New Delhi’s cooperation. Interactions between the two governments on the Iranian issue are not an exercise of persuasion-resistance and subsequent compliance, as media reports seemingly suggest. They are indicative of an involved bilateral process whereby a responsive New Delhi adapted to U.S.-led sanctions regime, and in turn Washington accommodated Indian interests.

Indian Prime Minister Narendra Modi might have promised to “reboot and reorient the foreign policy goals, content and process” through Bharatiya Janata Party’s 2014 election manifesto. However, as far as the Modi led National Democratic Alliance’s (NDA) official stand on sanctions is concerned, the government has maintained its predecessor’s position. Arguing that New Delhi does not support “economic sanctions that do not have the approval of the United Nations Security Council,” India has extended its sympathy to other countries facing sanctions as well. Nonetheless, during the reign of both, the United Progressive Alliance and NDA governments, New Delhi did not cease to adapt to geopolitical changes and conformed to international obligations. In the context of Iran, India remained flexible and the United States amenable. Washington returned New Delhi’s gestures by adjusting the sanctions regime that it had itself conceptualized and implemented. At this point, it is worthwhile to view the subject from a unique vantage point by taking a look at the Indian experience with U.S. sanctions on Iran.

India’s Stand on Sanctions against Iran

Although not the primary target of sanctions, Indian entities have come under the purview of U.S. sanctions against Iran. In 2004, two Indian scientists were sanctioned under the provisions of the Iran, North Korea, Syria Nonproliferation Act. The following year, two Indian firms — Sabero Organics Chemical and the Sandhya Organics Chemical — were sanctioned for their transactions with Iran. These sanctions involved supplementary economic restrictions, commonly known as secondary sanctions, which were designed to penalize non-U.S. citizens or companies for doing business with Iran. Aimed at completely isolating the target, secondary sanctions certainly diversified the scope of sanctions, impeding Iran’s dealings with the rest of the world.

Though sanctions on Indian entities were largely symbolic and transient, the Indian government conveyed its opposition to unilateral sanctions imposed by the United States, arguing that the measures were unjustified. Nonetheless, India stood by international efforts to check Iran’s nuclear ambitions. On Sept. 24, 2005, India voted against Iran at the International Atomic Energy Agency (IAEA), declaring Tehran to be in non-compliance with its Non Proliferation Treaty safeguard obligations. Subsequently in February 2006, India voted to refer Iran to the United Nations Security Council (UNSC). Later that year Iran was accused of possessing undeclared nuclear materials, refusing to allow the IAEA to inspect its uranium enrichment facilities and rejecting diplomatic solution. Thereafter, UNSC imposed sanctions on Iran.

Again in November 2009 India sided with the United States, endorsing a resolution, which criticized Iran’s nuclear program and insisted on the cessation of its uranium enrichment. India however, continued to express its concern over extra-territorial nature of specific unilateral sanctions. India’s opposition to unilateral sanctions on Iran stemmed from the fact that the constraints on investments in the Iranian energy sector were having an unfavorable effect on India’s energy security. Amid news of Iranian uranium enrichment, India came out with a clear stand on the issue. India did not want nuclear weapons to spread in West Asia but at the same time believed that Iran had a right to use nuclear energy for peaceful purposes, while fulfilling obligations of a non-nuclear weapon state under the Non Proliferation Treaty. Walking the tightrope, New Delhi tried to strike a sensible balance between India’s interests in Iran, and its obligations as a responsible nuclear power coupled with considerations for friends and partners.

Adapting India and Accommodating the United States

Affirmed as one of the largest consumers of energy in the world, India’s dependency on imported fossil fuels has only been growing. Yet, the Indian government and companies have been conscious of their oil imports from and investments in Iran. Oil imports from Iran made up 16 percent of India’s total oil imports back in 2008, but by the end of 2012 the figure stood at 10 percent. At the time when the Joint Comprehensive Plan of Action was signed between Iran and P5+1, India was importing merely about 6 percent of its total oil requirement from Iran. Reportedly, India stopped importing oil from Iran for a short period in 2015 to pressurize Tehran to be more amenable during the nuclear negotiations.

Though energy security is an important concern for India, New Delhi has adjusted to a sanctions regime that significantly targets Iran’s oil exports. As India slashed its oil imports from Iran, the topic was brought up for discussions in the Parliament. The government’s representatives maintained that Indian oil companies were diversifying oil purchases to discourage overt dependence on any specific country or region. Besides the government sector, the private players also adjusted to the US-led sanctions regime. In 2009, Reliance Industries Limited, the India-based operator of the world’s biggest oil-refinery complex decided to withdraw from Iran and re-establish trade ties only when the sanctions were lifted.

For its part, the United States has appreciated Indian efforts to adapt to the U.S.-led sanctions regime. Being one of Iran’s biggest crude oil importers, India’s support to the sanctions regime was imperative for its sustenance. Understanding the need to secure support from Iran’s partners, the United States tweaked the sanctions regime offering waivers to countries that reduced oil-imports as per its stipulations. India along with six other countries received sanction waiver in June 2012 after they significantly reduced crude oil purchases from Iran. Indian exemptions were regularly renewed by the United States after monitoring its oil imports from Iran. Apart from the waivers, the United States put in palpable efforts to secure India’s cooperation. In the last few years several U.S. diplomats have visited India to convince New Delhi to support sanctions against Iran. Hence, the United States has done much more than merely formulating a rigid regime, which punishes non-adherence. It has incentivized compliance and ensured cooperation by making use of diplomacy, while remaining sentient to the interests of countries like India.

Although several reasons have been given for the success of U.S.-led sanctions regime, it has been accepted that the support of Iran’s former partners was vital in making Tehran comply. For New Delhi, economic, political, and social connectivity with Iran brought its own set of benefits and insecurities, which made making foreign policy decisions a complex process. However the Iranian sanctions episode has proved to be a good illustration of how India’s global aspirations have taught New Delhi to adapt to geopolitical changes. Concurrently it has revealed how the United States significantly acknowledged Indian efforts and accommodated its interests. Implying, that securing compliance to primary and secondary sanctions was not the result of the United States’ iron-fisted policies and a sanctions regime that solely focused on sticks. But the sanctioner’s accommodative attitude — willingness to adjust its implemented regime to consider the interests of other countries.

Paul Loeb/AFP/Getty Images