How New Sanctions On Iran And Its Possible Withdrawal From Nuclear Deal Will Impact India

Iran has announced that it would reduce its commitments in a phased manner to the nuclear deal, also known as JCPOA (The Joint Comprehensive Plan of Action).

It announced that it would invoke articles 26 and 36 of the JCPOA. As per those articles, it will not abide by limits for enriched uranium (LEU) and heavy water, but would still be within compliance limits of the JCPOA.

This would be achieved by not exporting these (enriched uranium and heavy water). The move was seen as an attempt to get EU to deliver on its JCPOA commitments so that Iran gets some economic reprieve from the harsh US sanctions imposed last November and intensified this month when it didn't extend sanctions waivers for import of Iranian oil with the aim of reducing its oil exports to near-zero.

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Further after a period of 60 days, in case the other JCPOA signatories don¡¯t help Iran with a mechanism to access banking channels and sell its oil, Iran would suspend compliance with uranium enrichment limit of 3.67% and also modernise the Arak heavy water reactor.

Kelsey Davenport, Director of Nonproliferation Policy at Arms Control Association says that Iranian President Rouhani¡¯s announcement that Iran will no longer abide by the limits on heavy water and enriched uranium is an unfortunate but unsurprising escalation.

The Trump administration¡¯s systematic campaign to deny Iran all of the benefits envisioned under the deal drove Tehran to take this step.

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Davenport adds that while any violation of the nuclear deal is concerning, the steps Iran announced do not pose an immediate proliferation risk. It will be critical for the remaining parties to the deal to work with Iran to head off further steps that risk reigniting a nuclear crisis and increase the chance of conflict.

Jarrett Blanc, State Department Coordinator for Iran Nuclear Implementation under US President Obama and presently senior fellow in geoeconomics and strategy at the Carnegie Endowment for International Peace, says that Iran has laid out a step-wise approach.

It declared that it would pay less attention to limits of enriched uranium (LEU) and heavy water. US withdrawing from the sanctions waivers made it easier for Iran to manage stockpile limits It would be a couple of months by when it would get to the stockpile limits.

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They have also announced more dangerous steps after two months from now. Enriching uranium above 3.67%, restarting work on the Arak reactor and processing weapons grade plutonium. Why they did this is difficult to say.

It could be due to domestic compulsions. Or as leverage for economic support from Europe, Russia and China. Or it could be to get into the room with Trump with a Kim - style pageant.

Younes Zangiabadi, Vice-President of the Toronto based think-tank Institute for Peace and Diplomacy says that while Iran has not yet withdrawn from the Nuclear Deal, it¡¯s move today reveals that they are on the path to do so if the P4+1 do not back their political support with concrete actions that guarantee the economic benefits that Iran was promised under terms of the agreement.

However, this will be a step-by-step process, which in case of inactions by the remaining parties to the JCPOA, will probably be fully completed sometimes around the U.S elections. Given the rise of war rhetorics and the likelihood of more escalations with the Islamic Republic, Iran¡¯s full withdrawal can then have the greatest impact on US elections, threatening Trump's bid for presidency.

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Rouhani in his speech said that it was becoming increasingly difficult to stop the flow of narcotics and refugees to Europe, given that Iran¡¯s economy is in shambles. Narcotics and refugees from war-torn Afghanistan head towards Europe. This can be seen as an attempt to blackmail EU into doing at least something more than mere words as Iran is in huge economic stress.

The cancellation of sanctions waivers can potentially take down Iran¡¯s oil imports down to around 500 kbpd given that it would go mostly via the black market. No refiner is willing to risk trade for fear of US sanctions not anyone ship it or provide insurance.

Additionally now fresh sanctions are imposed on Iran¡¯s non-oil exports- iron, steel, aluminium and copper. It is a last ditch effort by the Rouhani administration from the economic warfare unleashed by the United States on Iran.

Rouhani in his speech added that it was diplomacy but with a new language and tone. The reason for the change of tone from friendly to legal, he said, was because one side can¡¯t bear the costs with no benefits.

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On one hand the US is unrelenting in applying economic pressure on Iran, on the other hand is Iran that is finding it hard to find breathing space but is still has to be cautious as to not give UNSC an excuse for slapping sanctions or the US waging war.

Andrey Baklitskiy nuclear, US-Russia and Iran expert at Moscow based PIR Center says that Iran would want to tread carefully. Tehran will try not to alienate Europe too much not to get EU or even UN sanctions reimposed, Iran will also try not to rush to action that might provoke Israel or US to use military force against it. Tehran still seems to try to outlast Donald Trump administration and restart the talks with next Democratic president.

Baklitskiy adds that article 36 and invoking dispute resolution mechanism is tricky - one step further and the whole thing goes to the UN Security Council and could trigger reimposition of all of the previous resolutions sanctioning Iran.

Asked if it applies even if Iran in not in violation, he says that there are no distinction, the final phase of dispute resolution mechanism is to invoke the Security Council and snap back all of the Security Council resolutions sanctioning Iran.

Iran is treading down a tricky slope. Will it come out unscathed by getting the concessions from EU, Russia and China that it wants. Or would a misstep, maybe coupled with provocations, make Iran repent its decision. As for India, it doesn't abide unilateral US sanctions but would abide by UNSC sanctions. Time will tell whether Iran's gambit pays off.

(Aveek Sen is an independent journalist working on cybersecurity and the geopolitics of India¡¯s neighborhood, focusing on Pakistan, Afghanistan, Iran, and Bangladesh. @aveeksen.)