India hails Iran nuclear agreement

India hailed the agreement reached between Iran and the P5+1 group — U.S., U.K., France, Russia, China and Germany — on Tehran’s nuclear programme, calling it a “significant step” towards a comprehensive settlement. A statement issued by the Ministry of External Affairs, after the agreement was announced in the Swiss town of Lausanne on Thursday night, said: “The announcement underlines the success of diplomacy and dialogue, which India has always supported.”

After several delays and an extended deadline, the Foreign Ministers of all the countries involved in what are called the E3+3 (Europe 3+3 or P5+1 of the Security Council and Germany) group and Iranian Foreign Minister Javad Zarif announced that they had a “framework agreement” to take forward their twin objectives of reducing Iran’s nuclear capabilities for civilian use only, while lifting financial sanctions imposed by the U.N., the European Union and the United States.

According to the draft agreement released by U.S. officials, Iran will reduce the number of installed centrifuges by two-thirds, bring uranium stocks down from 10,000 kg to 300 kg LEU (low-enriched uranium) and turn its nuclear facility in Fordow into an R&D facility for 15 years. All the excess stockpile and nuclear parts will be kept at an IAEA-monitored location, while the U.N., the U.S. and the EU will withdraw all sanctions that have crippled the Iranian economy for years.

Indian officials were cautious about the completion of the final agreement, but say once the deal is finalised, India could stand to benefit greatly. “If there is a significant withdrawal of sanctions, that would benefit our economic engagement greatly as even the most normal transactions had become very tedious for Indian businesses. From insurance to raising capital, every deal faced international hurdles,” a senior official told The Hindu.

India and Iran have an annual bilateral trade of about $14 billion, with an extremely high balance of trade problem, as India has been unable to pay Iran about $8.8 billion for oil due to sanctions, according to Commerce Ministry figures. The government has also had to bow to U.S. and international pressure on cutting its oil imports from Iran, and in March 2015 halted oil imports altogether for the first time in more than a decade in order to keep its international commitments.

Some are also warning that the Lausanne agreement could face a strain if the U.S. and the Iranian governments come under pressure from their hardline domestic constituencies in the months ahead. “Both sides are trying to play this as a great win for domestic reasons, and say that they have taken the other side for a ride,” explained former Indian Ambassador to Iran K.C. Singh. “With both President Rouhani and President Obama in weakened political positions at home, neither can afford to be seen as a loser from the agreement,” he told The Hindu.

If the Joint Comprehensive Plan of Action agreement is finalised as hoped, opinion is divided over how much India will benefit. While economists are predicting India-Iran trade could double, given old business ties between the two countries, officials concede that once sanctions are lifted on Iran, India would also have to compete with the U.S. and European suppliers for the “prosperous middle-class market” that Iran represents. In the short run, the big advantage for India could be a further reduction in the price of oil that India used to source at a much higher quantity pre-2012, when Iran was India’s second biggest supplier.

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Printable version | Oct 27, 2020 11:42:54 PM |

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