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With Modi determined to pursue better ties with Trump, Iran is a likely casualty

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India’s economy is too thin right now, even as it emerges from the challenges of demonetisation and GST, to be able to withstand US sanctions.

As US president Donald Trump targets Iran as part of his short-sighted trampling of the international security architecture, India is hoping it can flatter the American leader long enough to figure out a way to limit its own exposure to sanctions Trump is determined to impose on Iran.

The invitation to Trump to the Republic Day 2019 celebrations should be seen in this regard – even as betting has started on how long the infamously whimsical leader with a distinct weakness for Fox News will last out the tableaux and floats that are such an integral and wonderful part of Republic Day.

Not that Foreign Secretary Vijay Gokhale won’t prefer to break bread with the suave and sophisticated Iranian deputy foreign minister for political affairs Seyed Abbas Araghchi. The old connections between the two ancient civilisations are always a good subject to discuss over soma rasa and Glucose biscuits.

Aragchi, who was in Delhi on Monday, said he had “a very good sense” that India would find a way to continue cooperation, both on buying its oil as well as on Chabahar.

But the truth is that India has already come to the conclusion that it cannot afford to annoy the Americans too much.

A Rupee-Rial mechanism may be created, just as it was in 2012 when sanctions were last put in place. A Turkish bank may be found, like it was in 2012, which doesn’t participate in any money-transferring mechanisms that the Americans control (like SWIFT).

However much Trump fulminates, the Indian side is already taking hope from the fact that he has just met Russian president Vladimir Putin in Helsinki. After all, how badly can a guy hurt India through sanctions it intends to impose on Russia if he embraces the Russian leader himself?

No wonder Delhi seems so sanguine about its determination to buy missile defence systems from Moscow. All the sound and fury you would expect from India, determined to climb the high moral ground in favour of old friend Russia and against new upstart America, is missing.

A US delegation is now in town to persuade Delhi to ditch Tehran. Delhi will likely nod its head. As India’s exposure to the US economy increases, it is less likely to want to be singled out on braving Trump’s ire on Iran, especially when its own economy is barely out of the doldrums.

An India-US minor trade war is in the offing, with both threatening to take the other to the WTO. But the fact remains that India-US trade is now over $120 billion, which is in India’s favour.

That other perennial, the UN, is hardly in favour. Especially not when the UN has castigated India on its human rights record in Kashmir as well as in Thoothukudi. India’s old favourite line, that it will only abide by UN sanctions and not those imposed by a third country, such as the US, has found a new home in the dustbin of history.

So much better to try and find a happy solution with the man-child in the White House.

Meanwhile, Trump’s new best friend, Putin, has already been invited to Delhi. He will be here in the first week of October. The Modi-Putin embrace is sure to rival the Trump-Putin handshake.

So, what does India plan to do with Iran? After all, Tehran remains India’s number three oil supplier. Officials say they are hoping to find a way. External affairs minister Sushma Swaraj is going to Iran for a joint commission meeting in November, the same month that the sanctions kick in.

Already, refineries are being told to reduce their oil intake. In June, Reuters claimed, oil intake came down by 16 per cent. Mangalore Refinery & Petrochemicals Ltd, a subsidiary of ONGC, whose exposure to Iran oil is the greatest, began to change its machinery in 2012 itself. Private refineries, like Reliance, have said they will reduce their exposure to zero.

Fact is, India’s economy is too thin right now, even as it emerges from the twin challenges of demonetisation and GST, to be able to withstand the US sanctions. Its trade with Iran, unlike China, is too small to enable barter. Meanwhile, it seems that China may also dump Iran in favour of maintaining its relationship with the US, despite its own brewing trade war.

In this messy, evolving international order, what’s a presumed humiliation between friends? Even if Modi felt that Trump treated him like “just another Asian leader” at the 2017 Manila ASEAN summit, fact is that Trump’s maltreatment of America’s fiercest allies like Canada and the UK has been much worse.

With Modi determined to put his own angst with the US leader behind him, Iran is a likely casualty. When the cookie begins to crumble, the high moral ground quickly gets thrown out of the window.

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  1. The Republic Day parade is interminably long, especially when the columns of smartly marching soldiers are replaced by the tableaux from the states. President Trump would probably find time enough to shoot off a hundred tweets.

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