The Iran nuclear deal is a wonderful opportunity for India. The real test, however, will be whether the deal actually follows through (or even has the ability to follow through) on the opportunities presented. Far from being a stabilising factor, the nuclear deal, in my opinion, is in fact giving licence to Iran to destabilise the region significantly. It is this instability, though potentially economically damaging to India, which may be geopolitically beneficial to India. While North Korea and Pakistan had to nuclearize in order to exploit the sub-conventional space and change the status quo, the Iran nuclear deal gives Iran this space without ever having weaponised. Why?
At the root of my argument is the Russian opposition to snapback sanctions. Should such opposition continue, Iran’s compliance would have to be rewarded with lifted sanctions without snapback guarantees. Now any Iranian action in the region, be it an increase in Hezbollah attacks on Israel or increased support to Houthis in Yemen, cannot be punished by the sanctions that were lifted in lieu of nuclear concessions. Doing so would automatically invalidate the nuclear deal.
For India, however, a licence to Iran to be revisionist does two things. First, it bogs the jihadi problem down in its own backyard for the first time in many years instead of stirring the pot in Afghanistan or Chechnya (some of which had a fallout on India, specifically in Kashmir). This is important because it leaves countries like Saudi Arabia fighting a desperate situation on its own borders (in Yemen and possibly internal disturbances in the Shia majority eastern provinces) instead of exporting instability abroad. This expends Saudi weaponry, manpower, and treasure, and prevents its diversion to other trouble spots.
Secondly, the deal severely tests the limits of Pakistan-Saudi security guarantees. While renewing a paper pact on nuclear weapons is one thing, will Pakistan actually commit to any ground operation in Yemen – essentially committing to a pre-decided failure? Given Saudi incompetence in the campaign, it seems as though Yemen is very much heading into a quagmire. Most of the assets targeted by the Arab air campaign seem to be those not owned by Houthis but by more “ideologically flexible” allies that were or are part of the state. This has reduced the state’s ability to deal with not just the Houthis at a later date but also with Al Qaeda (making a resurgence).
The fear of a quagmire would limit Pakistani support and erode its credibility as a provider of security in the region, much as the United States’ waning support for the Anglo-French Suez offensive incensed De Gaulle to go nuclear. On the other hand, should Pakistan live up to its security guarantees, it would both alienate Iran even more than it already has and unleash fissiparous tendencies within Pakistan itself, given that at least 20% of its population is Shia. In either case, pillars of Pakistani security would be gravely affected. For the Saudis, overt nuclearisation would bring dramatic consequences for the United States security shield and Iran, and open up the same sub-conventional space in the region that Pakistan has exploited vis-à-vis India.
The automatic result of a rupture in Pakistan-Iran relations is that Iran’s past reluctance in allowing India to synergise its efforts at supplying Afghanistan (and enraging Pakistan) is more than likely to dissipate. The question of course is whether India will actually step up to the plate or allow Afghanistan to be gobbled up by Pakistani proxies like it did in the late 1990s. Whether Indian aid to Afghanistan is military or not is irrelevant – even the rumour of increased cooperation sets Pakistan in a destructive cycle, burning bridges with the Ghani administration.
The big question then is what all this instability means for India in economic terms, because geopolitically opportune situations can be economic disasters, and vice versa. Largely this has to do with the region’s reputation for being single-product economies – oil in this case. Saudi Arabia has deliberately kept oil prices low for three reasons: a) to thwart the shale revolution in the United States; b) to make Iranian oil sales unprofitable; and c) to keep Russian oil sales barely profitable. This has been wonderful for India, because not only has it reduced India’s balance of payments problems, but it has also had positive effects on the petrochemicals (fertilizers) sector. The net result of increased Iranian mischief could mean Saudi imperatives to keep oil prices low will only increase, while the situation will bring significant geopolitical positives to India.
Obviously no course of action will follow the exact chain of events described above, and many permutations and combinations exist in which things may not be all that good for India. All in all, however, should the region be stable or unstable, the situation could be a positive one for India. Unfortunately, knowing the Indian bureaucracy and the severe enforcement deficit it represents, most of the opportune moments may just be castles in the air.