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| Mohammad Javad Zarif, Foreign Minister of Iran |
Context
What was the Iran Nuclear Deal?
Iran agreed to rein in its nuclear programme in a 2015 deal struck with the US, UK, Russia, China, France and Germany.
Under the Joint Comprehensive Plan of Action (JCPOA)Tehran agreed to significantly cut its stores of centrifuges, enriched uranium and heavy-water, all key components for nuclear weapons.
The JCPOA established the Joint Commission,with the negotiating parties all represented, to monitor implementation of the agreement.
Why did Iran agree to the deal?
It had been hit with devastating economic sanctions by the United Nations, United States and the European Union that are estimated to have cost it tens of billions of pounds a year in lost oil export revenues. Billions in overseas assets had also been frozen.
Why has US pulled out of the deal?
Trump and opponents to the deal say it is flawed because it gives Iran access to billions of dollars but does not address Iran’s support for groups the U.S. considers terrorists, like Hamas and Hezbollah. They note it also doesn’t curb Iran’s development of ballistic missiles and that the deal phases out by 2030. They say Iran has lied about its nuclear program in the past.
Implications for India:
On Oil and Gas: The impact on world oil prices will be the immediately visible impact. Iran is presently India’s third biggest supplier (after Iraq and Saudi Arabia), and any increase in prices will hit both inflation levels as well as the Indian rupee.
It would impact the development of Chahbahar port.
INSTC (International North–South Transport Corridor): It will also affect these plans, especially if any of the countries along the route or banking and insurance companies dealing with the INSTC plan also decide to adhere to U.S. restrictions on trade with Iran.
Shanghai Cooperation Organisation: China may consider inducting Iran into the SCO. If the proposal is accepted by the SCO, which is led by China and Russia, India will become a member of a bloc that will be seen as anti-American, and will run counter to some of the government’s other initiatives like the Indo-Pacific quadrilateral with the U.S., Australia and Japan.
Global Implications:
- Down trends in global economy.
- Fuel prices would reach high points.
- Iran may block Strait of Hormuz which is a strategic choke point which inturn would affect global trade.
- Giant economy like India, China and Russia will suffer.
- US may cancel airlines from US to India because they pass over Iran which would affect airspace industry.
Recent Developments - What changes with outgoing Trump and incoming Biden?
While Donald Trump has sought to maximise pressure on Iran and isolate it globally, Biden has proposed to offer the Islamic republic a return to diplomacy. Iran said it would "automatically" return to its nuclear commitments if US President-elect Joe Biden lifts sanctions, as the outgoing administration doubled down with more pressure.
Biden has promised a return to diplomacy with Iran after four hawkish years under Donald Trump, who withdrew from a denuclearisation accord and slapped sweeping sanctions. Tehran again meeting its commitments "can be done automatically and needs no conditions or even negotiations," Foreign Minister Mohammad Javad Zarif said in comments published in the state-run Iran daily.
Zarif described Biden as a "foreign affairs veteran" whom he has known for 30 years. Once in the White House, Biden could "lift all of these (sanctions) with three executive orders," Zarif argued. If Biden's administration does so, Iran's return to nuclear commitments will be "quick", the minister added.
Washington's return to the deal, however, could wait, Zarif added. "The next stage that will need negotiating is America's return... which is not a priority," he said, adding that "the first priority is America ending its law-breaking".
President Hassan Rouhani meanwhile called the Trump administration "unruly", and said a Biden administration could "bring back the atmosphere" that prevailed in 2015 at the time of the nuclear deal, negotiated by Barack Obama's administration in which Biden was vice president. The accord offered Tehran relief from international sanctions in exchange for guarantees, verified by the United Nations, that its nuclear programme has no military aims.
Trump team doubles down
Trump, who has not accepted defeat in the 3 November election, is moving to keep ramping up pressure on Iran, hoping to make it more difficult politically and legally for Biden to ease sanctions. In the latest moves, the Treasury Department said it was freezing any US interests of the Foundation of the Oppressed, officially a charitable organisation for the poor that has interests across the Iranian economy.
The Treasury described the foundation as a "multibillion-dollar economic empire" and "key patronage network" for Iran's supreme leader Ayatollah Ali Khamenei that operates without government oversight. Also hit by sanctions was Iran's minister for intelligence and security, Mahmoud Alavi, on human rights grounds.
Outgoing Secretary of State Mike Pompeo, in an indirect response to Zarif as he arrived in US ally Israel, vowed to keep imposing "painful consequences". "The Iranian regime seeks a repeat of the failed experiment that lifted sanctions and shipped them huge amounts of cash in exchange for modest nuclear limitations," he said.
"This is indeed troubling, but even more disturbing is the notion that the United States should fall victim to this nuclear extortion and abandon our sanctions." Iran, which denies it is seeking to build a nuclear bomb, has since May 2019 gradually suspended most of its key obligations under the agreement, including limits to the production and stockpiling of low-enriched uranium.
The UN's International Atomic Energy Agency said Wednesday Iran had begun operating advanced centrifuges at an underground section of its primary nuclear enrichment facility at Natanz. Under Iran's deal with world powers, it is only meant to enrich uranium with a less sophisticated variety of centrifuges.
In its report last week the IAEA said Iran's stockpile of enriched uranium now stood at over 12 times the limit in the 2015 accord. The New York Times reported Monday that Trump had last week asked top aides about the possibility of striking Iran's nuclear facilities.
Senior officials reportedly "dissuaded the president from moving ahead with a military strike," warning him such an attack could escalate into a broader conflict in the last weeks of his presidency. Iran argues it has moved away from its commitments because of the sanctions and the inability of the other parties - Britain, China, France, Germany and Russia - to provide it with the deal's promised economic benefits.
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