The emerging US-Iran agreement has significant implications for India, including energy corridors, fertilizer supplies, and revival of the Chabahar Port project. As Gulf tensions ease, New Delhi faces a strategic crossroads that could reshape connectivity with Central Asia and Afghanistan.
K P Fabian is a former ambassador to Iran, Sri Lanka, Canada, Finland, Italy, and Austria. In an interview with Arti Bali, the diplomat analyses the impacts on India’s energy dependence via the Strait of Hormuz, stressing that quiet, sovereign diplomacy, not permission seeking, should guide India’s future path. Excerpts:
Q: How significant is the US-Iran deal compared to previous diplomatic efforts, including the 2015 nuclear deal? Does it represent a genuine strategic shift in relations?
A: First, it is important to clarify that in 2015 there was not a nuclear deal in the conventional sense but the Joint Comprehensive Plan of Action (JCPOA) negotiated during President Barack Obama’s administration. The JCPOA was designed to ensure that Iran would never develop a nuclear bomb because the International Atomic Energy Agency (IAEA) had full access to Iran’s nuclear activities. Under the safeguards regime, every aspect of Iran’s nuclear programme was monitored. If Iran enriched uranium beyond the agreed limit of 3.67 per cent, the IAEA would immediately know. Therefore, the JCPOA was capable of preventing Iran from developing a nuclear weapon. But it turned political. During the 2016 presidential campaign, Donald Trump increasingly criticized the Obama deal. Influenced by advisers such as Steve Bannon, he portrayed the JCPOA as a bad deal and gained support from influential constituencies, including sections of the Jewish lobby in the United States. In 2018, Trump withdrew from the agreement and reimposed sanctions on Iran without, in my view, presenting a valid reason. Iran initially continued complying because France, Germany and the United Kingdom – the E3 – were still committed to the deal. They promised Iran a financial mechanism that would allow trade despite US sanctions. However, under US pressure, those efforts collapsed. Iran then stopped complying with certain commitments, reduced cooperation with inspectors and began enriching uranium. Iran was not enriching uranium to build a bomb but to force the US back to the negotiating table. If Iran truly intended to build a weapon, moving from 60 per cent enrichment to weapons-grade levels would have taken only weeks. Ironically, Trump eventually had an opportunity to secure a deal that was even better than Obama’s. On February 27, at talks facilitated by Oman, representatives of the United States and Iran reportedly reached an understanding. Iran agreed to zero enrichment, zero stockpiling, and down blending approximately 1,000 pounds of enriched uranium. Never seeking a nuclear bomb. In other words, Trump obtained terms that were stronger than those under the JCPOA. He could have accepted the arrangement, lifted sanctions and normalised economic ties. Instead, events took a different turn after Israeli Prime Minister Benjamin Netanyahu reportedly argued that military action and decapitation strikes could bring down the Iranian regime. That calculation, however, did not work.
Q: What key factors enabled Washington and Tehran to reach an understanding after months of military conflict?
A: The conflict demonstrated the limits of military power in an asymmetrical war. Israel and the US possessed overwhelming military superiority, but asymmetrical conflicts do not always produce expected outcomes. A useful comparison is the Vietnam War. Despite massive American military power and extensive bombing campaigns between 1955 and 1975, the war ultimately ended with the withdrawal of the US. Iran’s asymmetrical strategy relies on threatening infrastructure linked to American interests across the Gulf region: military bases, airports, banks and other critical facilities. The Gulf Cooperation Council (GCC) states increasingly realized that if the conflict continued, Iran could inflict serious damage not only on oil infrastructure but also on water desalination facilities, which are essential for Gulf economies.
Q: How important was the role of regional mediators such as Qatar, Saudi Arabia, Turkey, and Pakistan in facilitating this breakthrough?
A: The GCC countries eventually realised that hosting American military facilities does not necessarily provide security. In many cases, it simply makes them targets. The UAE adjusted its earlier policy and moved toward engagement with Tehran. Other Gulf states also recognised the enormous risks posed by continued conflict. As a result, they encouraged Washington to pursue diplomacy and played a constructive role in facilitating a settlement. The UAE provides an important example. Initially, Abu Dhabi favoured a hard line against Iran. However, attitudes shifted. The last major Iranian attack on the UAE reportedly occurred on May 4. Subsequently, the UAE sent a delegation to Tehran. Media reported that the UAE released approximately $3 billion in Iranian funds that had been frozen there, although Abu Dhabi officially denied the report. The broader GCC came to understand that war would impose unacceptable costs. At the same time, Trump faced growing domestic political pressure. Rising fuel prices, inflation and opposition within his own MAGA base raised questions about America’s continued involvement in another Middle Eastern conflict. Voters asked why US soldiers should be sent to a distant war. Trump therefore had incentives to end the conflict. He also appeared to adopt an “escalate to de-escalate” strategy. Following reports of an Apache helicopter crash, Trump publicly warned that Iran would pay a price. However, there are reasons to doubt that Iran deliberately targeted the aircraft. Had the IRGC shot it down, they likely would have publicised the achievement and attempted to capture the crew. Neither occurred. It is possible the helicopter was lost for other reasons. In my assessment, Trump used the incident to justify a brief escalation before moving toward de-escalation and diplomacy.
Q: What are the biggest risks that could derail the deal?
A: One contentious issue concerns Iran’s frozen assets. These assets belong to Iran and were frozen by the United States. Their release should not be viewed as a charitable gesture but as the restoration of Iranian property. There has also been misinformation regarding previous financial transfers to Iran. President Trump has repeatedly claimed that President Obama sent plane-loads of cash to Iran. Historically, that characterization is inaccurate. The payments related to two separate issues: the release of American prisoners and the settlement of longstanding financial disputes. Before the 1979 Iranian Revolution, Iran had paid approximately $400 million for US weapons that were never delivered. Following legal proceedings at the Iran-US Claims Tribunal in The Hague, the tribunal ruled that the United States owed Iran the original amount plus approximately $1.3 billion in interest. The funds released under Obama were linked to implementing this legal settlement and facilitating prisoner releases. Therefore, Trump’s narrative omits significant historical context. Differences over sanctions relief, asset releases and implementation timelines remain potential obstacles to the agreement.
Q: What implications could the deal have for India’s Chabahar Port project and broader connectivity ambitions in Iran, Central Asia and Afghanistan?
A: President Trump initially spoke about regime change in Iran. He has now recognised that regime change is not achievable. In fact, the existing Iranian leadership may have become even more hardline. If negotiations succeed and sanctions are lifted, Iran’s economy could return to normal functioning. Improved US-Iran relations would create favourable conditions for the revival of several important Indian initiatives – Chabahar Port, the International North-South Transport Corridor (INSTC) and Broader connectivity projects linking India with Central Asia and Afghanistan. For these reasons, India should welcome the agreement.
Q: How could the deal influence India’s energy security, particularly regarding Iranian crude imports and diversification of energy supplies?
A: India should always pursue diversification, but decisions should ultimately be based on market realities. At present, its reopening would therefore provide enormous relief to India. At the same time, India must avoid excessive dependence on any single supplier. The United States wants India to purchase more US energy. While some purchases make sense, pricing often reflects political rather than purely market considerations. India’s approach toward Russian oil provides a useful lesson. India was correct to continue purchasing Russian crude despite external pressure. However, publicly seeking American waivers was poor diplomacy because it created the impression that India needed permission regarding its energy choices. A sovereign country should quietly pursue its national interests.
Q: Could the agreement help address India’s fertilizer requirements ahead of the Kharif season?
A: Yes, there will be a positive impact, but the benefits will not be immediate. Agriculture depends heavily on timing. If fertilizers are unavailable at the required moment, farmers face difficulties regardless of later improvements. The agreement should improve supply conditions over time, but some disruptions may continue in the near term.
Q: Could lifting sanctions create opportunities for Indian companies in infrastructure, shipping and reconstruction projects?
A: Absolutely. When I served in Iran between 1976 and 1979, thousands of Indian managers, doctors and engineers were working there. The Indian community played a significant role in the Iranian economy. A similar situation could emerge again. There has been discussion of reconstruction projects worth hundreds of billions of dollars. If relations between Washington and Tehran improve, American companies will certainly seek opportunities. Indian firms could also benefit substantially through infrastructure, logistics, shipping and development projects. India is likely to gain considerably from a normalisation of relations.
Q: Iran has argued that the US should eventually leave the region and that a new regional security framework should emerge. Is that realistic?
A: Not immediately. However, there has been a noticeable shift in priorities. Previously, Washington insisted that Iran curb its missile programme and stop supporting groups that Western media often describe as “proxies”. I have reservations about that term. Take Hezbollah. It emerged in 1982 following Israel’s invasion and occupation of parts of Lebanon. While inspired by the Iranian Revolution, its existence was rooted in local circumstances. The Houthis similarly control significant territory within Yemen and cannot simply be described as Iranian proxies. Today, negotiations are focused much more narrowly on the nuclear issue rather than these broader regional questions.
Q: Could this agreement encourage President Trump to focus on ending the Russia-Ukraine war?
A: Possibly. With the Iran issue moving toward resolution, President Trump is likely to devote more attention and energy to the Russia-Ukraine conflict. He has already indicated that he has spoken with both Presidents Putin and Zelenskyy. Therefore, it is reasonable to expect renewed diplomatic efforts on that front.