The historic nuclear accord between Iran and the international community unveiled in Vienna on Tuesday helps remove a number of recent constraints on Indian foreign policy. As they facilitate a larger Indian role the Greater Middle East, the consequences of the nuclear agreement also present New Delhi with a number of new geopolitical challenges.

Over the last decade, the deepening tensions between Washington and Tehran had threatened India’s prospects for reconciliation with the global nuclear order, prevented it from an effective pursuit of energy security, limited its options in stabilising Afghanistan, and weakened its ability to cope with violent religious extremism.

C. Raja Mohan
A leading analyst of India’s foreign policy, Mohan is also an expert on South Asian security, great-power relations in Asia, and arms control.
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The accord, which blocks Iran’s pathways to assembling a nuclear weapon on short order in return for lifting most of the sanctions on Tehran, vindicates New Delhi’s prudent strategy that acknowledged the problems with the Iranian nuclear programme, called for a peaceful resolution of the dispute, and focused on India’s own liberation from atomic sanctions.

New Delhi’s attitude to Iran’s proliferation became Washington’s touchstone in accepting India’s atomic exceptionalism under the controversial civil nuclear initiative unveiled by Prime Minister Manmohan Singh and President George W Bush in July 2005.

Many on the left and right in New Delhi demanded that India blindly back Tehran against Washington. If New Delhi had taken that advice, India might be gnashing its teeth today, as Tehran, in the name of “heroic flexibility”, offered multiple concessions to Washington to secure the deal.

Like the US-India civil nuclear initiative, the understanding between Washington and Tehran is bound to face intense scrutiny from opponents in both capitals who are determined to undermine it. The arguments will be heated and focused on a range of technical issues. But the real issues are political.

The deal is not just about preventing Iran’s nuclear proliferation. It is also about normalising relations between Washington and Tehran after three and a half decades of intense hostility since the 1979 Islamic revolution ousted the Shah of Iran, one of America’s leading allies in the region.

President Barack Obama is persuading America to overcome decades of demonizing Iran and accept Tehran’s critical role in shaping the future of the Middle East. As the US-Iran nuclear deal rearranges the regional balance of power, there will be many significant opportunities and challenges for India.

For one, the lifting of international sanctions will bring large amounts of Iranian oil into the market and push petroleum prices down for an extended period of time and boost India’s macroeconomic stability. At a broader level, Indian companies will be able to partake and benefit from Iran’s renewed economic growth.

The good news on the economic front is leavened with new political challenges that will emerge from the nuclear accord. The US-Iran political thaw has generated deep anxieties among America’s traditional allies in the region — including Israel and Saudi Arabia.

The rise of Iran has pushed these two into an unlikely partnership; and both of them are likely to take steps of their own to deal with the consequences of Iran’s new status in the region.

It is not unreasonable to assume that the current tensions between Iran and Israel, and between Tehran and some of its Arab neighbours, are likely to sharpen in the coming months and years.

While India’s opportunities in Iran are prospective, its current engagement with the region is weighted heavily towards the Arab Gulf and Israel. New Delhi, then, will have to devote greater attention to the region and learn to navigate the region’s new contradictions.

India’s thinking about the Middle East, whether from the UPA or NDA, has tended to be ideological and rooted in their domestic political considerations. Prime Minister Narendra Modi needs to break from this tradition and develop a strategy towards the Middle East that is firmly anchored in realpolitik.

As the Middle East becomes more complex and demanding, India’s options in Central Asia and Afghanistan are likely to expand rapidly as Tehran’s isolation ends. Iran’s role as India’s gateway to Central Asia, amidst Pakistan’s reluctance to offer overland transit facilities, has already begun to acquire renewed salience for the Modi government.

Iran’s rise as a regional actor will also open new options for India in Afghanistan amidst the current gloom about New Delhi’s declining capacity to influence the events in the country after US troops have ended their combat role there.

While the situation is not entirely similar to the mid 1990s, when New Delhi and Tehran actively collaborated to counter the influence of Pakistan and the Taliban, there will be room for much coordination between India and Iran. If America and Iran do begin to cooperate against violent extremism in the Greater Middle East, it should have many positive consequences for combating terrorism in the subcontinent.

As Iran and America move from nuclear accommodation to political cooperation, New Delhi must discard its shibboleths on the Middle East and embark on a vigorous and pragmatic engagement with all the key actors in the region, including Iran, Saudi Arabia, and Israel.

This article was originally published in the Indian Express.