General Facts About the Relations, Importance of the Ties and Bilateral Issues

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Are the Ties Weakening?

  • 2005: India’s IAEA vote against Iran

  • In Nov 2010 India abstained on a UN resolution critical of the human rights situation in Iran. It had hitherto supported Iran by voting against this resolution

  • Khamenei made reference to Kashmir among the ‘nations’ that needed rescuing.

Iran is also a crucial partner for India’s energy security. We have an immense stake in a peaceful resolution of the complicated issues surrounding Iran’s nuclear question.

General Facts About the Relations

  • Economic

  • Iran is India’s core energy partner – its second largest oil supplier

Importance of the Ties

  • Energy security

  • Geospatial importance of Iran

  • India needs Iran to physically access Afghanistan. It can do so from the Iranian port of Chabahar. Hence, for reasons of geography, Iran is central to India’s Afghan policy

Bilateral Issues

Energy Payments Issue

  • In December 2010, India directed its companies not to use Asian Clearing Union (ACU), headquartered in Tehran, for transactions with Iran.

  • Under the ACU mechanism, third countries find it difficult to trace transactions by companies because the settlements are made by the Central banks of the member countries.

  • After this, India started using German bank, EIH, to make payments

  • However, this system too broke down in May 2011 after the EU imposed sanctions on Iran

Iran’S Nuclear Issue

Iran’s defiance of Security Council resolutions ordering it to suspend all enrichment of uranium has resulted in UN Security Council sanctions on Tehran.

Why has the Security Council ordered Iran to stop enrichment?

  • Because the technology used to enrich uranium to the level needed for nuclear power can also be used to enrich it to the higher level needed for a nuclear explosion. There are fears that Iran is either secretly planning to make a nuclear device or is at least acquiring the know-how so that one day it has the option of doing so.

  • Iran hid an enrichment programme for 18 years, so the Security Council says that until Iran’s peaceful intentions can be fully established, it should stop enrichment and other nuclear activities.

  • Under international law, an order from the Security Council is held to supersede rights granted by other international organisations. The council has ordered sanctions under Article 41 of the UN Charter which enables it to decide “what measures not involving the use of armed force are to be employed to give effect to its decisions”. The Council has also called on Iran to ratify and implement an arrangement allowing more extensive inspections as a way of establishing confidence.

How does Iran justify its refusal to obey the Security Council resolutions?

  • Under the Nuclear Non-Proliferation Treaty (NPT), a signatory state has the right to enrich uranium to be used as fuel for civil nuclear power. Such states have to remain under inspection from the International Atomic Energy Agency (IAEA). Iran is under inspection, though not under the strictest rules allowed because it will not agree to them. Only those signatory states with nuclear weapons at the time of the treaty in 1968 are allowed to enrich to the higher level needed for a nuclear weapon.

  • Iran says it is simply doing what it is allowed to do under the treaty and intends to enrich only for power station fuel or other peaceful purposes. It says the UN resolutions are politically motivated. President Mahmoud Ahmadinejad has said: “The Iranian nation will not succumb to bullying, invasion and the violation of its rights.”

What does Iran say about developing nuclear weapons?

  • It says it will not make a nuclear bomb. President Ahmadinejad said in 2009: “We don’t need nuclear weapons... it’s not a part of our programmes and plans.” He told the UN in 2010 that nuclear weapons were “a fire against humanity”.

  • Iran’s Supreme Leader Ali Khamenei, who is reported to have issued a fatwa some time ago against nuclear weapons, has said: “We fundamentally reject nuclear weapons.”

How soon could Iran make a nuclear bomb?

  • This would depend on Iran taking the decision to make a nuclear device and Iran says it will not do so. But experts believe that technically it could produce enough highly enriched uranium for a bomb within a few months. A US general said in April 2010 that Iran could still take several years after that to make a device. The CIA chief Leon Panetta said in June 2010 that it could take two years. Israel’s retired intelligence chief Meir Dagan has said it could take until 2015.

  • US Secretary of State Hillary Clinton said in January 2011 that sanctions had slowed down Iran’s nuclear work. She also said that Iran had faced technical difficulties, possibly a reference to a computer virus said to have affected its centrifuge machinery. But in July 2011, Iran said it was installing new, faster centrifuges to speed progress in uranium enrichment. If successful, it could shorten the time needed to stockpile material which can have civilian as well as military purposes, if processed much further.

  • In theory Iran could leave the NPT with three months’ notice and it would then be free to do what it wanted. However, by doing that it would raise suspicions and leave itself open to attack. If, while remaining in the treaty, it enriched to nuclear weapons level or was found diverting material for a bomb in secret, it would lay itself open to the same risk.

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