Modi’s Master Stroke (#MMS)

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As 2019 elections are approaching, all the political parties are getting active. All non NDA groups are aligning for a common cause & NDA projecting their achievements to get the second term. We all know that upcoming election will be one of the toughest fights for #modishah to win. To ensure the win they must have a winning strategy but to my understanding #modishah has already played their card to win the next Lok Sabha election.
Indian diplomacy is setting an example for all the nations especially for Turkey and China as India has managed to sign two important defense pact with two old rivalry countries: COMCASA with USA in Indo-US 2+2 Dialogue and high-tech S-400 missile defense system, during a bilateral meeting with Russian President Vladimir Putin. A good diplomat can understand that these pacts complement each other and maintained strategic relations with both Russia & USA. But #MMS lies in the pact signed in the month of Oct’2018 with Iran for supply of Crude oil.
For those who are not aware that - USA has imposed economic and political sanctions on Russia, Iran & North Korea as per US law called CAATSA (Countering America's Adversaries through Sanctions Act), which also discourage other countries from buying Russian weapons, Iranian Oil & any economic activity with North Korea. Under same act Washington is constantly threatening Turkish administration to pull out the deal of S400 with Russia and has even imposed sanctions on China recently for procuring 10 Russian Sukhoi Su-35 fighter jets and surface-to-air missiles from Russia.
Now, Trump administration to choose between punishing New Delhi (and destroy the defense relationship) OR granting India an exemption, weakening the effect of the sanctions and opening up the US to accusations of favouritism. India is also not yet immune from CAATSA, but US administration would definitely be considering various aspects such as:
  1. India provides a strategic advantage to counter Chinese influence in Indian ocean region.
  2. Indian borders are very disturbed that makes India a big buyer of defense equipment.
  3. Imposition of sanctions would lead to pushing India to join hand with Russia and China, that makes a very strong opponent to US and EU nations.
  4. Sanctions could also affect COMCASA pact.
All these considerations would have stopped Washington to initiate the process of sanctions on India but still the fear of sanction is not washed out. Under the clouds of sanction, New Delhi has signed a pact with Iran for supply of crude oil. Now the question arises, what so luring about Iranian Oil?

Iran Oil comes with a lot of profitable deals such as:
  1. India can pay in rupees for Iranian oil from November (after cut-off date in CAATSA).
  2. Iranian Oil Company provides 60 days of credit for purchases. The credit term is not available from suppliers from Saudi Arabia, Kuwait, Iraq, Nigeria, and USA.
  3. Iranian crude is bought on a CIF basis and shipped on Iranian tankers. Under Cost, Insurance and Freight (CIF) mode of shipping, the seller assumes the responsibility of transportation and insurance.
  4. New Delhi also thinking for barter system, by supplying goods including wheat, soya-bean meal and consumer products to Iran in exchange for oil.
  5. Iran is India's third-largest oil supplier behind Iraq and Saudi Arabia.
India had planned to import about 25 million tonnes of crude oil from Iran in the current fiscal, up from 22.6 million tonnes imported in 2017-18. This act will definitely upset the Trump Administration. As I understand Trump’s America First policy, he may not further take lenient view towards India. US would have initiated the process of sanction on India but the process will take time and could only be imposed after 2-3 months (i.e. February).
Here the master stroke (#MMS) comes: the sanction in the month of February, (2 months before the lok sabha election) will definitely affect the public sentiments. Country’s patriotism will be on its highest peak and could be channelized in the favor of NDA, as Iran oil will help Indian administration to reduce the Petrol/Diesel price.
Now the question comes to your mind would be: Are these sanctions bad for Indian Economy? Did Modi govt. played a gamble on Indian growth?
These could be answered by viewing the historical facts such as:
  1. The sanction imposed on China was limited to Chinese army and related personals.
  2. US’s CAATSA has provision to reduce the extent of sanction based on the merit of case.
  3. After imposition of sanction on China and Iran, negligible impact on domestic stock market was observed.
India is an emotional country and the public sentiments can be directed into a specific domain if they find belief in a leader which #modishah is good at. Now I have an unanswered question for you "Whether political parties should use public sentiments for political gain?"
Bibliography
  1. https://edition.cnn.com/2018/10/05/asia/india-s400-deal-intl/index.html
  2. https://economictimes.indiatimes.com/news/defence/russia-india-to-sign-deal-on-s-400-air-defence-systems-this-week-kremlin/articleshow/66044294.cms
  3. https://www.popsci.com/china-and-russia-sign-biggest-arms-deal-decade-buy-worlds-best-missile#page-5
  4. https://www.bbc.com/news/world-us-canada-45596485

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