US President Donald Trump’s administration is ratcheting up its hardline policies in two areas where India’s interests run counter to Washington’s – the latest is in Iran, where America has declared the Islamic Revolutionary Guard Corps (IRGC) as a terrorist organization.
Three weeks before the waiver given to India to buy Iranian oil expires, Trump made the terrorist designation on Monday, imposing tough sanctions on anyone dealing with the IRGC, a powerful government organisation with tentacles across the Iranian economy.
This puts the IRGC on par with the Al Qaeda, Lashkar-e-Taiba, Jaish-e-Mohammed and the Islamic State, which are on the US foreign terrorist list.
The other problem area is India’s planned purchase of the Russian S-400 Triumf missile defence system, which would come under sanctions imposed by the US on Russian military equipment makers.
Taking a hardline last week, Washington stopped supply of equipment for the US-made F-35 stealth fighter jets to Turkey because it is buying the S-400 and Vice President told Ankara that it must choose between being a member of the western NATO alliance and the Russian anti-missile system.
The challenge for India will be to navigate these challenges in dealing with the Trump Administration.
India is reported to be asking the US to permit it to continue buying Iranian oil at its current level of about 1.25 million tonnes each month when the six-month exemption from sanctions expires early next month.
Asked about the oil waivers given to eight countries, including India, Secretary of State Michael Pompeo said at his news conference on the IRGC declaration on Monday: “We’ll make that decision in due course as we move towards May 2, but it – this absolutely extends the – and creates clarity around those transactions that create risk for companies not just in Europe, but frankly all over the world.”
“It is a criminal offense for any person to provide material support to a designated foreign terrorist organisation,” said Nathan Sales, the State Department’s counter-terrorism coordinator, adding leaving room for flexibility: “How that applies in particular cases we’re simply not going to speculate about right now.”
Trump imposed sanctions on most commerce with Iran last year after withdrawing from the deal made by former President Barack Obama, the other permanent members of the UN Security Council, Germany and the European Union with Tehran to stop its development of nuclear weapons.
European countries have not gone along with Trump in backing out of the Iran nuclear deal and the declaration of the IRGC as a terrorist organisation is aimed mainly at them.
“We’re adding a layer of additional sanctions on the IRGC to make radioactive those sectors of Iran’s economy that are influenced or controlled by the IRGC,” Brian Hook, the US Special Representative for Iran, told the media.
Pompeo said: “Businesses and banks around the world now have a clear duty to ensure that companies with which they conduct financial transactions are not connected to the IRGC in any material way.”
He said that the lawyers of European companies doing business with Iran face more risk because “other governments and the private sector will now see more clearly how deeply the IRGC has enmeshed itself in the Iranian economy”.
While pressure will mount on India to break the deal with Moscow, New Delhi is on a different plane.
In the case of the S-400, there is a key difference between Turkey and India: The US has said prime reason for its opposition is that the security of the F-35 will be compromised if it works with the Russian system, while India does not have such US aircraft.
Moreover, Ankara and Washington have mounting differences on a number of political, diplomatic and strategic issues ranging from prosecution of US consular employees to President Recep Tayyip Erdogan’s governance, and from involvement in Syria to interaction with Israel.
But there are no such problems between the US and India and Washington is actively courting it as part of its Indo-Pacific strategy.
Assistant Defence Secretary Randall Schriver told a House of Representative panel last month that while there was a punitive US legislation “hanging over” India’s S-400 deal with Russia, “we want to work through it because India is an emerging partnership for us”.