United States ends Iran nuclear deal - How will India be affected?
United States President Donald Trump has pulled out of the Iran nuclear deal. The deal was signed in 2015 by former U.S President Barack Obama.
After the deal was signed in 2015, India had strengthened ties with Iran. Now, relations between India and Iran could face a major setback.
The biggest impact will be felt on the Chabahar Port Development Project, where India has invested. Chabahar is one of the most important ports in Iran. It is still under construction and India had plans to invest 500 million dollars in the construction. This is because the port will help boost sea trade between India and other countries including those in the Arab world.
The port is located in the Gulf of Oman. It will help India cut transport costs and time for Indian goods by one-third. It will also help boost trade between India, Afghanistan, and Iran.
India and Iran signed a pact in February 2018. According to this, a part of the port will be made operational for Indian trade for 18 months.
The other impact will be felt on the price of oil. India is the third largest oil consumer in the world. Iran is the third largest oil supplier after Iraq and Saudi Arabia. The withdrawal of the U.S from the nuclear deal, will affect India’s import of oil from Iran.
India is still safe since most of the European countries also depend on Iran for oil. If they decide not to withdraw from the Iran nuclear deal, India can breathe a sigh of relief. However, prices of oil are expected to shoot up in India. This will push inflation higher and send GDP lower.
Finally, India has strong ties with the U.S, Israel, and Saudi Arabia. With Israel and Saudi Arabia deciding to support Trump's decision to pull out, India will be isolated.
Will India support the U.S decision, or will it strike a balance between all parties involved and maintain a balance? Only time will tell.