A very bad decision on the iran deal

A very bad decision on the iran deal

US President Donald Trump’s decision to pull out of the Iran nuclear deal is bad news: for the oil market, remittance income flows from West Asia, India’s current account deficit, the value of the rupee and inflation. But the bigger worry is the increased likelihood it imposes on the West Asian region of yet another war that would plunge the region into active Shia-Sunni hostility and give new life to an Islamic State currently on the wane.

The US is doing serious damage to its own leadership of rule-based internationalism and driving the Europeans to create their own geopolitical identity. The move would further aid China position itself as the focus of resistance to American arbitrariness.

India would do well to take a stand that can be justified on principle, rather than go by the number of defence contracts the country has with Israel and the US, the two main protagonists in a tiny camp that will face Europe, Russia, China and most of the rest of a disapproving world.

As America re-imposes sanctions on Tehran, covering companies that do business with Iran, the nature of resistance that Europe, Russia and China put up would determine how far the damage goes. If the US threatens to cut off dollar dealings for any bank that does business with a firm with Iran links, the Europeans would have to buck the dollar dominance of global finance, to offer real resistance.

Would they be prepared to go that far, even with open support from China? On the other hand, it would be politically damaging for European leaders to be seen to be kowtowing to Trumpian whimsy. Since the Europeans are convinced that the Iran deal is a workable deterrent against Iran’s nuclearisation and that for the US to unilaterally withdraw from the deal is the height of irresponsibility, they would have to put up some credible resistance.

If Israel and the US stage what they call pre-emptive strikes on Iran to thwart bomb-making, armed unrest and war would spread across the region. Iran’s clerical regime would dig in, with popular support. Trump has made a very bad, horrible decision. India must say so.