Hassan Rouhani

Modi-Imran in SCO: Be ready for some tough pictures

(This is a reprint from NewsBred).

It would be a hectic two days for Prime Minister Narendra Modi in Bishkek, Kyrgyzstan (June 13-14). The flight detour through Oman and Iran too wouldn’t have helped. Then there is this little matter of bilateral talks with at least five heads of states:  Xi Jinping (China), Vladimir Putin (Russia), Hassan Rouhani (Iran), Ashraf Ghani (Afghanistan) and Sooronbay Jeenbekov (Kyrgyzstan) besides the actual SCO Summit.

Modi’s diplomacy in Shanghai Cooperation Organization (SCO) isn’t just about his time. It’s also about the long shadow of United States which would follow his every move and not just with China, Russia, Pakistan and Iran—all in US crosshair for one reason or the other.  Modi has the image of a tough leader, engaging the world but never aligned to any particular bloc. Much of it would be tested by Friday.

Modi, of course, can’t overlook the probing audience of a billion and a half people in India and Pakistan. There would be photo-ops with Pakistan’s prime minister Imran Khan. Every nuance of arched eyebrows, warm or cold smile, firm or limp handshake, would be dissected in reams of papers. A hug though is as good as ruled out.

In many ways SCO would be about optics. Its’ stated goal is to fight against the three evils of terrorism, separatism and extremism. But Pakistan would be spared this embarrassment. Our troublesome neighbour is making its debut in SCO since its formal induction in 2017—as is the case with India. This  powerful  Group of the East has had always China behind the wheels. Modi can enjoy the ride but can’t change the course.  China is friends with Pakistan for nothing.

Meanwhile, India and Pakistan have chosen to embarrass each other on the eve of the 19th SCO Summit. India first sought a free airspace for Modi’s passage to Bishkek. However once it was granted, wisdom prevailed and Modi opted to decline the offer. Pakistan, or its propped-up separatists in Jammu & Kashmir, then killed 5 CRPF jawans in Anantnag on Wednesday. Be ready for some tough pictures from Bishkek.

It isn’t to say that SCO is without merit for India. US needs India for its Asia strategy and by appearing shoulder-to-shoulder with Putin and Xi, Modi would keep Donald Trump sober when the two meet in a fortnight’s time in Osaka for G20 Summit (June 28-29).  Modi’s bilateral with Rouhani in Bishkek would further force Trump’s hands. That the host in Osaka would be Japan’s Shinzo Abe, who is outreaching to Iran later this week, is no little matter.

India also needs to have the right thermostat to keep matters with China from running too hot or too cold. Modi’s recent visit to Maldives must have prodded the wounds of China. Bishkek would be a good place to straighten out the ruffled feathers since the two leaders, Modi and XI, are slated for a summit in October, a la Wuhan style.

There is no gain denying India sees a friend in Russia. It was Russia which facilitated the entry of India into SCO which, to begin with, was primarily a Central Asia lobby that needed an axis after Soviet Union exploded in 1991. Modi and Putin aren’t taking any steps back on S400 missiles or their growing defence cooperation and Bishkek would afford the two leaders a moment to align themselves against the evil eye of US.

SCO is as good a moment as any to keep Afghanistan in India’s good books. The mountainous country could be fuming for having been not invited for Modi’s oath ceremony last month.  Kabul is insecure for more than one reason—Taliban, fostered by Pakistan, is gaining international currency; and US is vowing a retreat of its armed forces. India has always been an all-weather friend and Bishkek couldn’t have come at a better time.

India also needs access to information and intelligence from the Tashkent-based RATS (Regional Anti Terror Structure). China’s push for Belt and Road Initiative (BRI) also can’t be allowed a free goal. India also  can’t afford to be hemmed in by Pakistan and China on its two flanks. A global economy can’t be known as only a South Asian behemoth. India needs physical access over and above its northern borders into Eurasia and SCO affords an excellent opportunity.  A rising India is critical to all big powers and it must keep all its suitors on tenterhooks. A stronger and more empowered Modi by his people would only help.

 

Modi finds his nerves tested by US on Iran

(This is a reprint from NewsBred).

United States wants India to cut down its oil imports from Iran which stands as its third biggest supplier after Iraq and Saudi Arabia. President Donald Trump has followed his pre-election promise with withdrawal from the 2015 Joint Comprehensive Plan for Action (JCPOA) which had enabled China, Russia, France, Germany UK, European Union and the US itself to dilute the economic sanctions against Tehran. Now the sanctions are back in place with the deadline of November 6, 2018 and the world is in turmoil, no less India.

The Trump administration has chosen a new way to browbeat the countries which don’t fall in line. Last August, it introduced CAATSA (Countering America’s Adversaries Through Sanctions Act) to scare those away from trade relations with “hostile” countries such as Russia, North Korea and Iran. International banks and companies which defy the sanctions would bear the brunt. Less oil imports from Iran would hike up the prices and import bills, not just of India but of many around the world. It would hit both inflation and Indian rupee. Since US dominates the re-insurance and payment gateways, bypassing them is difficult.

India’s dilemma is apparent. Before 2005, it paid $12-14 billion annually to oil bills by Iran. But signing the 2005 Indo-US Nuclear Civil Deal, gave New Delhi’s leash in US hands. India voted against Iran in the IAEA General Conference in September the very year; dithered on the Iran-Pakistan-India Pipeline and sounded the death knell of Turkmenistan-Pakistan-India (TAPI) gas pipeline project. By 2014, India had reduced the Iranian oil imports to $4 billion annually.

The US treasury methodically shut down the banking options for India who then began paying Turkey by cash which then converted it to gold bars and sent it across to Tehran. India was in no position to pay oil bills in US dollars. India did try the balancing act: while Reserve Bank of India (RBI) ceased dealing with Tehran-based Asian Clearing Union in 2010, it came to an understanding with Iran to pay half of its bill in Indian rupees in 2012.

But once the JCPOA came into being, India-Iran trade relations grew back to 2012 days. India also decided to pay out $6.5 billion it owed to Iran, held up due to sanctions. Modi government renewed the stalled Chahbahar port project. Its’ ministers made a beeline to Tehran with promises of oil and infrastructural projects. Iran obliged on its part by granting Oil and Natural Gas Commission (ONGC) the gas fields of Farzad B for exploration. The air of optimism only grew better when Iranian president Hassan Rouhani visited New Delhi this February with his oil minister Bijan Zanganeh. India pledged it would double its oil imports from Iran in 2018-2019. Iran, on its part, promised to cut down the freight by $1 per barrel. India pledged to increase import by 500,000 barrels a day.

But now comes the fresh US imposition. Even though foreign minister Sushma Swaraj has reiterated India would only abide by the mandates sanctioned by the United Nations (UN), it’s easier said than done. India and US have a booming trade of $140 billion which could take a grave hit, as well as around $31 billion of bilateral trade surplus advantage India has. Chahbahar port project, which could save millions in trade and increase Afghanistan’s tilt towards India, stands to lose steam. Besides, it just would give a bigger fillip to China to snug closer to Iran, shutting the doors on India.

India would be encouraged by the stand of UK, France, Germany who have expressed “regret and concern over Trump’s disruptive action. The Modi government meanwhile has started to flex its own muscles: in reaction to US postponing the 2+2 dialogue, India has declined US’ offer to host Defence Minister Nirmala Sitharaman. India also seems steadfast in increasing its military deals with Russia which faces similar offensive sanctions from United States.

The one fall-out of all this, including trade barriers ratcheted up by both US and India, is Modi government swinging back appreciably into the China-Russia zone. India has this strategic advantage where countries are looking to wow India rather than the other way around. However, India-US relations for the moment are several notches down than they have ever been since Trump came to power.