India’s American Friends and Iranian Partners

NEW DELHI – The United States recently took the Iran-sanctions monkey off India’s back: it granted India an exemption from Iran-related financial sanctions in exchange for significant cuts in Indian purchases of Iranian oil. Nevertheless, Iran continues to cast a pall over an otherwise brightening US-India relationship.

From India’s perspective, Iran is an important neighbor with which it can ill afford to rupture its relationship. Indeed, India already seems locked geographically in an arc of failing or dysfunctional states, confronting it with external threats from virtually all directions.

If India joined the US containment strategy against Iran, it would have to bear serious strategic costs. For starters, it would lose access to Afghanistan via Iran, which has served as a conduit for the substantial flow of Indian aid to Kabul. Moreover, containment would undermine India’s energy interests.

Few countries are as dependent on the Persian Gulf region’s hydrocarbons as is India, which imports almost 80% of its consumption. Iran is the world’s third-largest net oil exporter (with the world’s second-largest natural-gas reserves as well), and it is a strategically located gateway to other energy suppliers in Central Asia and the Middle East.