P5+1 and Iran Nuclear Deal: Terms, Implications and Benefits for India

P5+1 and Iran Nuclear Deal: Terms, Implications and Benefits for India

Question: P5+1 and Iran have reached a landmark deal for curbing the nuclear programme of the Islamic Republic in exchange for sanctions relief. Discuss the terms of the deal as well as its implications and benefits for India.

World powers and Iran reached a landmark deal for curbing the nuclear programme of the Islamic Republic in exchange for sanctions relief

Accord was announced by Iranian FM M.J. Zarif and EU Policy Chief Federica Mogherini in a joint statement in the Austrian capital.

Terms of the Deal

- Ban on the Iranian republic for purchasing certain duel use machinery and technology will cease

- EU and US financial and economic sanctions on Iran will be removed

- Iran’s frozen assets will be released

- Sanctions on the National Iranian Oil Company, shipping line, Iran’s central bank and other institutions will be lifted

- The deal has been called as a “win win” solution

Implications of the Deal

- Historic deal will serve as a re-set following decades of animosity

- Lack of deal would have meant higher chance of more war in the Middle East

- The deal is built on verification

- Accord seeks to end 12 years of nuclear standoff between Iran and the Western powers

- Accord will also prevent Iran from producing enough material for a nuclear weapon for atleast one decade and impose new provisions for inspection of Iranian facilities including military sites

- Iran will lower the number of centrifuges from 19,000 to 6,104 as per the deal

- Around 1044 centrifuges will be used for purposes other than uranium enrichment

- This means the Iranian republic will be rid of 98% of enriched uranium

- This deal also gives IAEA access where required

- IAEA and Iran have also signed a roadmap to resolve outstanding issues

Benefits for India

- India has welcomed successful conclusion of negotiations on Iranian nuclear issues between Iran and EU 3+3(US Russia and China) and IAEA

- Announcement comes a day after PM Modi agreed to boost connectivity in Central Asia; this opens up opportunities of International North South Transport corridor from India to C. Asia

- Areas of energy cooperation and connectivity between the two nations will move forward due to the deal

- Removal of sanctions also strengthened hopes of economic engagement with Iran; oil imports from Iran will be regularised and become cheaper

- Banking and insurance procedures with Iran will also ease current alack of access to Afghanistan, through the opening of the Chabahar port

- However, India will have to balance ties with Iran and Israel at the same time and compete with Russia and China for Iran’s economic ties

- There are geostrategic implications of the deal as well

Facts and Stats

- India and Iran have annual bilateral trade of USD 14 billion

- There is an extremely high BOT problem as India has been unable to pay USD 8.8 billion for oil to Iran on account of sanctions

- Government also had to cut oil imports from Iran following international pressure