On May 8, US President signed a presidential memorandum and announced the withdrawal of US from the Iran Nuclear Deal that was signed by his predecessor Barack Obama in 2015. Calling the deal “decaying and rotten”, Trump said that he will be instituting the highest level of sanctions and also warned other countries from helping out the Iranian government.
As things have gone sour between Iran and US, it has created a tricky situation for India as it can’t pick sides at the moment. Explaining it in detail, here’s all you need to know about the Iran nuclear deal and how it’s going to affect India.
What is the deal?
The Iran Nuclear Deal, officially known as the “Joint Comprehensive Plan of Action” is an agreement signed by Iran with several world powers including the US, UK, France, China, Russia, and Germany. As per the deal, Iran was made to reduce its ability to produce plutonium and uranium, the two main components used in making nuclear weapons. In return, the economic sanctions on Iran were subsided.
What does Trump think?
Apparently, Donald Trump is not in the favor of the deal and even regarded it as the “dumbest and most dangerous misjudgments ever entered into” in the history of America.
Iran is playing with fire – they don’t appreciate how “kind” President Obama was to them. Not me!
— Donald J. Trump (@realDonaldTrump) February 3, 2017
What are other world powers saying?
While Russia, China, and European countries remain dedicated to the agreement, Israel has welcomed Trump’s move. Israeli PM Benjamin Netanyahu claimed that Iran has been “brazenly lying” about the nuclear program and is not complying with the deal.
Impact on India
• Fresh US sanctions to Iran would lead to a hike in the oil prices. As per the World Bank report, there will be a 20% hike in the global prices of the energy commodities like crude oil, gas, and oil. This, in turn, would put a pressure on the rupee, inflation will be higher, and GDP will go down.
• India has committed more than USD 500 Million for the development of the Iranian port of Chabahar. Iran had already shocked India by inviting China and Pakistan in the development of the port. Now if India picks the side of US, China along with Pakistan will get closer to Iran and that’s definitely not good for India.
• India has built close relationships with US, Israel, and Saudi Arabia. Now that US ha pulled out of the deal and the remaining two are supporting Trump, it has become an awkward situation for India because now it’s difficult to maintain good relations with all four countries.
• China has expressed its intention of admitting Iran to the Shanghai Cooperation Organization which is already joined by Pakistan and India. This would imply that India would be allied with China, Pakistan, and Iran; a group that the US would definitely not like.