IAEA Vote Seen Hurting India-Iran Ties

Anupama Narayanswamy, The Washington Times:

South Asia analysts warn India of a backlash from Iran over India's controversial Sept. 24 vote with the United States referring Iran to the U.N. Security Council.

Analysts say that although New Delhi's decision stemmed from wanting to safeguard its civilian nuclear deal with Washington, it could lead to long-lasting acrimony with Iran, a country India depends on to meet its rising energy needs.

"It's difficult to think that the vote was not influenced in some measure by India's deal with the U.S.," said Lawrence Scheinman of the Center for Nonproliferation Studies in Washington.

Justifying what is seen as a diplomatic turnaround from India's nonaligned stand, and supporting the EU-led resolution, India's ambassador to the United States, Ronen Sen, was quoted in a Times of India article as saying: "Just for a moment, take geopolitics out of the equation. Oil and gas are finite resources. Nuclear energy is not. READ MORE

"Cutting-edge research in nuclear sciences and nonconventional energy like fuel cells and bio-fuels is not taking place in Iran or Saudi Arabia," he added.

After years of mutual distrust, the United States and India reached an accord in July in which Washington agreed to help India's civilian nuclear program. This pact now needs to be ratified by Congress, and will take effect after ratification, analysts think.

The EU resolution that passed was a watered-down version of the one first proposed and Indian officials took credit for this.

Harm already done?

After the resolution was passed, Iran, which has signed the nuclear Non-Proliferation Treaty (NPT), threatened full-fledged battle against the International Atomic Energy Agency by enriching uranium and not allowing short-notice inspections that are mandatory under the NPT.

India's Foreign Secretary Shyam Saran said at a press briefing in New Delhi on Sept. 26: "... much of the effort that we made, the diplomatic effort that we made, was in fact on behalf of Iran."

But some analysts think the damage to Iran-India ties has already been done, putting plans for a multimillion-dollar gas pipeline between the two countries in jeopardy.

In June, Tehran and New Delhi signed a $22 billion liquefied natural gas contract under which India will buy 5 million tons of LNG per year for 25 years starting in 2010.

The planned pipeline, which will run through Pakistan, was seen as a portent of peace in the region.

Amid widespread speculation about this contract, the Iranian government is sending mixed signals. Its Foreign Ministry spokesman, Hamid Reza Asefi, said Sept. 27, that Tehran was surprised by India's action. He said India's vote "came as a great surprise to us," adding: "We will reconsider our economic cooperation with those countries that voted against us."

And in a quick turnaround, a day later Iranian officials denied reports saying that India's vote at the IAEA would not affect the pipeline agreement with India.

Although analysts are not betting on the pipeline being built, they are reticent about this volatile issue, and some officials change their positions each day.

'Friends with everybody'

Stephen Cohen, senior fellow and analyst of India at the Brookings Institution, said: "Iran has announced that the pipeline deal will not go through, and once again, India is being tested at the old game of friends with everybody."

Another analyst George Perkovich, vice president of the Carnegie Endowment for International Peace, said: "It makes economic sense that it will be done. But then, there is a lot of dependence on Pakistan, which is not a totally attractive deal for the Indians."

But according to Indian officials, the pipeline deal will still go through.

An Indian Embassy official in Washington said: "We see no connection between the proposed Iran-Pakistan-India gas pipeline and India's voting in an international forum."

Deal benefits both

It's mutually beneficial for the two countries to carry out the deal — Tehran needs to find lucrative markets for its gas reserves and India needs to meet its growing energy demands.

Now it seems as if both countries are trying to allay fears that the pact may not materialize.

India imports about 70 percent of its crude oil to meet its energy demands, and by 2020 its demand is expected to double. Currently, only 2.7 percent of the country's energy needs are met by nuclear energy, which may not be a viable substitute for natural gas.

Iran, which has the second-largest reserve of gas, is geographically suited as a key supplier to India.

India now central

The shift in Indian foreign policy is considered a direct result of the country's geostrategic importance. It is the world's largest democracy and a nuclear power. Analysts say this could make it a counter to China's developing capabilities. India-U.S. ties could be a strategic alliance to regulate Chinese behavior in the future.

Mr. Cohen said: "India's vote at IAEA is not only in response to concerns of the United States, but also those of Israel. The new Iranian government has been vocal about its negative sentiments toward Israel, and it is decision time for India."

It's a win-win situation for India, which gets a nuclear agreement with the United States without having to sign the NPT.

Like Iran and India, those watching the discussion are taking a wait-and-see position.

Agreement flouted

As Mr. Scheinman of the Center for Nonproliferation Studies in Washington said, it would be interesting to see how the United States will convince the other countries that are a part of the Nuclear Suppliers Group to alter the rules to accommodate India.

The NSG was created after India conducted nuclear tests in 1974. This is a voluntary group that has a mutual agreement that no member will sell nuclear items to countries that have not signed the NPT. Now that the deal between the United States and India is on, the onus is on Washington to convince the members of the NSG, analysts said.

According to Mr. Scheinman what India has gained by its responsible display of nuclear prowess is legitimate status as a nuclear power. Other than Iran's threat to cut ties with countries that vote against it at the IAEA, India has not lost much.

Nonaligned status lost

The only thing India has lost is its nonaligned status. The Non-Aligned Movement, formed in 1961, represents the interests of developing nations.

"Yes, they have lost their nonaligned status, but the Non-Aligned Movement is merely rhetoric in this context. India is just being responsive to new opportunities and abandoning their constant rhetoric," Mr. Cohen said.

Calling the Non-Aligned Movement "a mythical construct," Mr. Perkovich said there has always been an asymmetry between nations on this issue. When it came to the final vote, the resolution stated facts and India could not have refuted them. Iran has been going against the NPT and that was clearly visible, he said.

EU is also a factor

But it's not time yet for the Indians to be punished or rewarded.

It was not only pressure from the United States, but also from the EU nations with which India hopes to advance economic ties that prompted New Delhi to take this step, Mr. Perkovich said.

"Obviously, India wants to look good as a nuclear power," he said.

As criticism of Indian Prime Minister Manmohan Singh's decision to vote against Iran grew in India — from both the opposition and from the leftist parties in the Congress-led United Progressive Alliance — Foreign Secretary Saran insisted there was no shift in India's foreign policy.

Support from the Left is crucial for the survival of the alliance.

BJP's 'about-face'

The opposition leader from the Bharatiya Janata Party (BJP) has also criticized Mr. Singh's decision, saying that India is succumbing to pressure from the United States. A sore point for the opposition is the way Mr. Singh's government went about changing the government position, ending in what is being seen as a complete turnaround.

Although factions within the UPA and the BJP are divided, the nuclear agreement with the Bush administration is a big breakthrough for India, especially after Canadian Foreign Minister Pierre Pettigrew announced on Sept. 26 that Ottawa is reversing its policy and is ready to supply India with dual-use nuclear technology.

Mr. Pettigrew said Canada is considering nuclear power-reactor sales to India.

"Canada has been one of the major critics of India's nuclear program since 1998, when India tested nuclear warheads," said Mr. Perkovich. Today, they are adopting a stand much like the Bush administration that signing the NPT is not crucial.

"And this is more important for India than the deal with the U.S. itself," he said.