What are the implications of the Joint Comprehensive Plan of Action, otherwise known as the Iran nuclear deal, for the future of India-Iran relations?

The Iran deal is both an opportunity and a challenge for India. The deal means that India can start rebuilding its multifaceted relationship with Iran, which includes increasing interaction in the oil and gas sector, building links to Afghanistan and Central Asia, and engaging a key actor in the region. Iran is a critical source of oil and gas, and India will now be able to import more significant amounts of oil and gas with fewer restrictions. Hence, India is publicly supportive of the deal precisely because it helps normalize the country’s relations with Iran.

Yet while the nuclear deal may ease India’s energy situation, it also poses complications. First, the agreement has been opposed by two of the United States’ closest allies, Israel and Saudi Arabia, both of which are important to India. Although India wants to maintain a relationship with Iran, it cannot cross a certain point for fear of complicating relations with other countries in the region. This could create a geopolitical competition where India will have to walk between the raindrops to manage competing relations with Middle Eastern states.

Second, sanctions have actually helped improve the balance of payments between India and Iran. India has otherwise been importing more than exporting, ensuring that the balance of payments favors Iran. If sanctions are lifted, the situation is likely to reverse, with India becoming more beholden to Iran in terms of financial outflows.

In addition, the nuclear deal may lead to more competition for India’s transportation projects with Iran, particularly in light of China’s recent $46 billion investment in Pakistan. But the agreement also may help speed up negotiations for the Chabahar port project and the north-south corridor, a major transportation project initiated by Russia, Iran, and India in 2002. The corridor would allow India to use Iran as a conduit for access to Afghanistan and Central Asia and bypass Pakistan.

You wrote that the deal will allow India to increase oil imports from Iran and lead other countries to enter the market, including Japan, South Korea, and China. Is the introduction of new players into Iran’s oil market cause for concern for the Indian government?

Once sanctions on Iran are lifted, India will no longer be one of the few buyers of Iranian oil, and competition will certainly increase. But oil prices are likely to remain low, primarily because the United States is becoming more energy independent. Thus, oil-rich countries like Iran will be keen on selling more supplies, and India, China, and other oil importers will be willing to buy as much as they can. At the same time, India has begun diversifying its energy resources. New Delhi increasingly looks at Africa as a source of imported oil and gas, and Nigeria became the largest exporter of oil to India for a short period in 2015. Nonetheless, as discussed above, greater oil imports could skew the balance of payments between India and Iran, forcing India to think more innovatively about what it can sell to make the balance of payments more even.

Regarding exports to Iran, India has an advantage in machinery, infrastructure, and even the petrochemical industry. Indian companies have become interested in investing in exploration and exploitation in Iran, whose oil and gas industry has been in disarray and is looking for new investments and technology. If sanctions are lifted, one big potential project is the on-again, off-again Iran-Pakistan-India pipeline. The Farzad gas field is another project in which India is keen on stepping up its investment.

India imports 70% of its crude oil from the Gulf and 85% of its natural gas from Qatar, according to the International Energy Agency. Furthermore, there are over 7 million Indian citizens living in the Gulf. Given India’s interests in both energy and human security, what steps has the government taken to help stabilize the region?

There are two main things that India has done. The first is using the existing security architecture laid down by the United States and its allies, on which India is very much dependent. The second is adhering to a policy of noninterference. New Delhi has not been supportive of the Arab Spring, nor has it necessarily gone out of its way to oppose the movement. India has remained largely agnostic on the matter. Not taking sides (such as during the Gulf War) has benefited India because its oil and gas supply has never been interrupted. The seven million Indians who reside in the Middle East live in relative security and have been untouched by the turmoil in the region.

However, several recent developments will force India to follow a more proactive policy. The first is the rise of the Islamic State of Iraq and Syria (ISIS), which has begun targeting Indians living in the Middle East and kidnapping Indian nurses working in Iraq. New Delhi has responded primarily by working to evacuate citizens from conflict areas in the region, such as with Operation Rahat in Yemen. But even now Indian policy has been more reactive than proactive. The government does not seem to have thoroughly considered how to confront the challenge of ISIS and mitigate threats to the security of its citizens.

The second challenge is that as the United States becomes more energy independent of the Middle East, it may affect the existing security architecture. We are seeing regimes in the region being challenged by the Arab Spring or other movements, and whether the existing security architecture established by the United States and its allies will remain intact is not clear. If it does, what will India do to support this system? If it does not, will India contribute to building a different security architecture to protect its interests? Unfortunately, that too is unclear.

Should India work more proactively to ensure the region’s security?

India’s noninterference policy in the Middle East has served it very well until now. This, however, is beginning to change as India not only becomes much closer to Israel but must balance relations with Iran and Saudi Arabia. I believe that India will have to be more proactive in the region, particularly if the United States disengages. If it is not proactive, other powers—for example, China—may step in, which would not necessarily serve India’s interests. However, India cannot be proactive by itself—it needs to work with other countries, particularly the United States.

The Obama administration recently reversed course and endorsed U.S. general John Campbell’s recommendation to slow the drawdown of troops in Afghanistan. How will this decision affect the role India plays in that country?

India has always been extremely supportive of the presence of U.S. and NATO troops in Afghanistan. It has consistently argued that there needs to be a long-term commitment to build up the nascent Afghan state. India has invested over $2 billion in Afghanistan since 2001, which is its single-largest investment in terms of development assistance to any country. These investments come under threat if the Taliban or other groups not supportive of a united Afghanistan rise to power. These groups have already started targeting Indian and Indian-funded projects, so the Obama administration’s decision has been very welcome. But New Delhi is opposed to negotiations with the Taliban, which it does not believe are effective in ensuring Afghan stability. This is obviously a difference of opinion between India and the United States.

Has India considered sending its own troops or security forces to Afghanistan? As ISIS poses a new threat to the region, how is India confronting terrorism?

There has been some debate in India about sending troops to Afghanistan, but Pakistan would most likely veto that, as it is already concerned about an Indian presence in Afghanistan. Having Indian troops on the ground there would be unacceptable to Pakistan. Yet I do not think that India would put troops on the ground in the region even if there were a UN peacekeeping presence—which is extremely unlikely in any case. That being said, India has been contributing to building up the security capability of Afghanistan in other ways—for example, by training Afghan police officers as part of a trilateral project funded by the United States.

Relatedly, India has various counterterrorism cooperation initiatives with many Gulf countries, particularly with the United Arab Emirates (UAE). Prime Minister Modi recently visited the UAE and released a joint statement that emphasized an increased India-UAE partnership on counterterrorism. Many groups operating in India that work in the terrorist-criminal nexus have ties and routes to the UAE, so this higher level of cooperation is significant. In many ways, the joint statement can also be seen as an anti-Pakistan statement. It reassures India that Pakistan will not be able to use UAE territory (without the knowledge of the Emiratis) for anti-India operations, which was the case in the past.

As India becomes more prosperous and builds a stronger relationship with the United States, it becomes a more tempting target for attacks by groups like ISIS and al Qaeda. Al Qaeda has become much more vocal about targeting India and Indian interests. It is my sense that India will try to deal with the problem alone, but I believe that cultivating friends and partners, particularly the United States, to work with against al Qaeda would be more effective. Counterterrorism cooperation is an opportunity to strengthen the U.S.-India relationship.

In July 2015, India abstained from a UN Human Rights Council vote to condemn Israel’s military offensive in Gaza in 2014. Because India has historically voted in favor of the Palestinian cause, some experts have argued that this signals a diplomatic shift. Is there a new tenor in the relationship between India and Israel?

While it is understandable that Palestinians might see this as a change in Indian policy, the issue is slightly more nuanced. India may not vocally support resolutions, but it will not necessarily oppose them. The India-Israel relationship has been growing ever since it was established in the early 1990s. Israel today is among India’s top arms exporters. As such, the security relationship is flourishing. There have been different approaches to the relationship between the two primary parties in India. The Congress Party has not impeded Indo-Israeli relations but also has not been overt about strengthening them. During the Congress Party’s most recent tenure, few high-level visits occurred. The current Bharatiya Janata Party (BJP) government has traditionally been much more overt in its support for Israel. The number of high-level visits, for example, has increased significantly and included foreign ministers and the president. There are now plans for the prime minister to visit as well. India certainly supports strengthening its relationship with Israel, but I think Indian support for the Palestinian cause will continue.

India has historically maintained good relations with the Assad family. In light of the Syrian civil war and resulting refugee crisis, many in the international community have called on New Delhi to support regime change. Although India has called for a long-term political solution, given its aspirations to eventually sit on the UN Security Council, should it take a stronger position against the Syrian regime?

India has been mostly indifferent to Syria, which is far enough away that it does not matter significantly to New Delhi in strategic terms. Even if India took a stronger position, its stance on Syria is unlikely to influence its chances for a seat on the Security Council because the current council is divided on the issue.

That being said, Indian concern about Syria is very much driven by two experiences: Libya and Iraq. India has witnessed regime changes in both countries that have not worked. In Libya, Qaddafi had not always been a friend of the Indian government, but Indians were very concerned about how the post-Qaddafi regime transition plan would work.

Regarding Syria—another multicultural, multiethnic society—Assad belongs to the Alawite minority faction, and India sees that historically Syrians of different denominations have been able to live together. The challenge to the Assad government comes from the majority groups, and the Indian government wonders if a political change would result in majority-dominated rule and suppression of minorities. This is not to say that the Indian government supports Assad, but that it is unsure about what a post-Assad regime would look like.

These issues resonate with Indians as they do with many Americans. Democracies should protect the interests and security of minorities. Frankly, that concern is not being addressed by any party in Syria. From this perspective, the Indian approach focuses on what power-sharing should look like in Syria. This is not to say that India believes Assad should stay in power, but we need to ask what a post-Assad Syria would look like, and how it can keep from turning into another Libya or Iraq.

Waheguru Pal Singh Sidhu is a Nonresident Senior Fellow at both the Brookings Institution and New York University’s Center on International Cooperation. His research focuses on India’s evolving grand strategy, the role of India and other emerging powers in the global order, nuclear weapon challenges and security, and development challenges in fragile states.

This interview was conducted by Kaela Mananquil, an Intern at NBR.