Thinking Long Term on India and Iran

By , 5 January, 2011, No Comment

New post at Foreign Exchange on the India-Iran oil deal and the challenges of securing funding for it amidst the US-led sanctions on Tehran. My take:

the U.S. position in recent years has been that India is most valuable as an ally when it is looking eastwards, and competing with China in the South China Sea or through trade relationships in South East Asia; that is the view favored too by a number of Indian policy wonks and popular in the Indian press.

But this banking move suggests that inside the halls of power, Indian leaders understand what I tried to argue in November: that India is most likely to challenge China, and thereby benefit other great powers, if it rectifies relations in South Asia and uses its relationship with Iran to build a trading zone to its west.

From Washington’s perspective, it’s a classic clash between short- and long- term policy objectives, between the nuclear issue and the need for an India that is strong in the region. There are no signs as yet that the U.S. government wants to shift its strategy towards the long-term and let this deal stand, but if it did, I for one would welcome it.

Read it all.

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