- Why it was in News?
- What is Iran Nuclear Deal?
- Background of Iran’s Nuclear Programme
- What is Uranium Enrichment?
- Major Provisions of JCPOA
- What role does the United Nations Security Council play in this crisis?
- Criticism of the deal
- Why did US pull out of the Iran deal?
- How Iran was affected?
- Global implication of US withdrawal from JCPOA deal
- Impact of US withdrawal from JCPOA on India
- Beneficiaries of a JCPOA collapse
- Policy recommendations for India
Iran Nuclear Deal
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Why it was in News?
- Amid escalating tensions with the United States, Iran is threatening to surpass the limit on the uranium supply permitted under the 2015 nuclear agreement.
What is Iran Nuclear Deal?
- The Iran nuclear deal, also known as the Joint Comprehensive Plan of Action (JCPOA), is an international agreement that exchanges Iran’s nuclear ambitions for international sanctions relief.
- In 2015, under this deal, six countries (China, France, Russia, the UK, the United States and Germany) and the European Union agreed to lift economic sanctions imposed on Iran.
- In return, Iran agreed to limit its sensitive nuclear activities, enrichment capacity and level, and allow in international inspections.
Background of Iran’s Nuclear Programme
- 1950s: Iran received technical assistance under the U.S. Atoms for Peace program.
- 1967: The United States supplied the Tehran Nuclear Research Center (TNRC) with a small research reactor.
- 1976: Till 1976, Iran concluded several nuclear technologies related contracts with foreign suppliers and invested in education and training for its personnel.
- 1979: Iranian Revolution of 1979 and new Iranian government’s opposition to nuclear technology resulted in the near disintegration of Iran’s nuclear program post 1979.
- 1984: New Iranian government expressed a renewed interest in nuclear power.
- 1990: Iran signed long-term nuclear cooperation agreements with Pakistan and China.
- Meanwhile, U.S. suspected Iran of using its civilian nuclear program as a cover for secret weapon development. As a result, China abandoned to assist Iran while Russia continue to do so by announcing the completion of constructing Bushehr nuclear power plant which was abandoned during previous Iranian government.
- 2003: The International Atomic Energy Agency (IAEA) adopted a resolution welcoming Iran’s decision to suspended Uranium enrichment. However, the Board noted that Iran’s new declarations contradicted the Agency’s previous information about its nuclear program.
- Iran agree to cooperate with the IAEA and entered into negotiations with the EU-3 (France, Germany, and UK) temporarily suspending nuclear activities.
- 2003-04: US and IAEA found evidence of Iran doing nuclear developmental activities. Iran accepted the allegation for the first time.
- 2005: Iran notified the IAEA that it would resume uranium conversion activities and rejected the EU-3’s Long Term Agreement, as it felt that the proposal was heavy on demands and light on incentives.
- As a result, U.S. blocked the financial assets of individuals and entities supporting Weapons of Mass Destruction (WMD) proliferation.
- 2006: Iran ended its voluntary implementation of the Additional Protocol of IAEA and resumed enrichment at Natanz nuclear facility. Iran also inaugurated a heavy water production plant at Arak.
- 2007: Iran admitted that the Pakistan supported it in its nuclear activities. However, Iran refused to answer about its UF4 conversion activities (The Green Salt Project), high explosives testing, and re-entry vehicle design.
- 2009: Iran ran out of enriched uranium fuel which prompted Iran to ship its domestically produced Low Enriched Uranium (LEU) to a third country for enrichment. However, under this fuel swap agreement, Iran wanted to send this in phased manner which was not acceptable by IAEA.
- S. imposed sanctions on foreign companies that help supply gasoline to Iran.
- 2010: This fuel swap agreement was renewed which was brokered by Brazil and Turkey.
- P5+1 requested to have peaceful nuclear program and Iran requested that international sanctions be lifted. However, the talks failed.
- 2011: Russia put across lifting of Iran’s sanctions, with Iran’s compliance, in Phased manner. However, Formal discussions on the basis of the proposal never took place.
- IAEA released first comprehensive report citing all Iran’s secrete nuclear activities including secret Project ‘Amad’.
- 2012: U.S. ordered the freezing of all property of the Government of Iran, including its Central Bank, and all other Iranian financial institutions.
- The P5+1 requested that Iran has to stop uranium enrichment up to 20% U-235 and close the Fordow Fuel Enrichment Plant. Iran did not accept it.
- More bans form US and European Union (ban on the provision of insurance and other shipping services) on Iran was put.
- 2015: Joint Comprehensive Plan of Action (JCPOA) was signed.
- 2016: Iran was declared to be in compliance with all of its obligations under the JCPOA. Certain EU sanctions lifted.
- 2018: Israel revealed the seizure of documents of Iran’s secret atomic archives citing JCPOA had been negotiated under false pretences.
What is Uranium Enrichment?
- Naturally, uranium has less than 1 per cent of isotope 235, the element needed for power generation or weapons grade material.
- Enrichment to less than 20 per cent uranium-235 is considered low level and can then be used in many nuclear reactors for power production.
- Building a nuclear bomb on the other hand requires several kilograms with 90 per cent uranium-235.
Major Provisions of JCPOA
Uranium enrichment capacity
- Iran can make a nuclear bomb by enriching uranium to 90% within 2-3 month (breakout time). JCPOA would remove the key elements Iran would need to create a bomb and increase its break-out time to one year or more.
- Iran’s current capacity of gas centrifuges would be reduced by more than two-thirds.
- For the first 15 years of the deal, Iran would not enrich beyond the level of 3.67% purity, low-enriched uranium (LEU) of the kind used in nuclear power stations.
Fordow enrichment plant
- The Fordow nuclear plant would be used only for non-military research for 15 years. Two-thirds of its centrifuges would be removed and the remainder would not be allowed to enrich uranium.
The enriched uranium stockpile
- Iran’s stockpile of Low Enriched Uranium (LEU) would be reduced from its current level of about 7,500 kg to 300kg, a reduction of 96%.
Research, development and future enrichment capacity
- There would be limits on the R&D work Iran could do on advanced centrifuges to stop sudden upgrade its enrichment capacity after the first 10 years of the agreement.
The heavy water reactor at Arak
- Iran would redesign the Arak nuclear reactor so it could not produce any weapons-grade plutonium and all spent fuel would be sent out of the country as long as the modified reactor exists. Iran would not build any new heavy water plants until 2031.
- Inspectors from the International Atomic Energy Agency (IAEA) would have full access to all Iran’s declared nuclear sites. Inspectors would be able to visit non-declared sites where they think nuclear work might be going on.
Investigation into past activity
- Iran would provide access to facilities and people suspected of involvement in past experimental work on warhead design to IAEA.
- The US and EU would provide guarantees that financial and economic sanctions will be suspended or cancelled. The EU would end its banking sanctions, and Iran would be allowed to participate in the Swift electronic banking system. US would issue presidential waivers suspending the operation of US trade and financial sanctions.
A new UN security council resolution and the arms embargo
- The JCPOA will be incorporated into a new security council resolution intended to replace and supersede six earlier sanctions resolutions imposed on Iran over its nuclear programme.
- An arms embargo on Iran would remain in place for five years, and a ban on the transfer of missile technology would stay for eight years.
What role does the United Nations Security Council play in this crisis?
- The Security Council adopted a resolution in 2015 that endorsed the nuclear agreement and ended United Nations sanctions against Iran.
- The resolution, 2231, includes what is known as a “snapback” provision that could reinstate those sanctions if other parties to the agreement complained that Iran was cheating.
Criticism of the deal
- ‘Sunset’ clause (a measure providing end date to a specific treaty) of the JCPOA will allow Iran to develop nuclear weapons.
- Some argue that the inspections process of Iranian nuclear sites provides ample time for the Iranians to cheat (stockpile nuclear weapons secretly).
- Through JCPOCA, Iran will be able to reconvene trade with the EU, China etc. This type of economic support can fuel the terrorist organizations (Hezbollah and other militant organizations).
- This deal is only a medium-term plan and it also does not address Iran’s non-nuclear weapons and missile programmes.
- Since the signing of the nuclear accord in 2015, Iran’s regional policies not have changed.
Why did US pull out of the Iran deal?
- In 2018, US withdraw from JCPOA deal. US accused Iran violating the spirit of the deal, arguing that Iran was not an ally and that it was working against US interests in the Middle East.
- However, UK, France and Germany stayed with the deal.
How Iran was affected?
- Iran holds the world’s fourth-largest proved reserves of crude oil amounting to 12.9 percent of global proven crude oil reserves after Venezuela, Saudi Arabia, and Canada and is home to the world’s second-largest proved reserves of natural gas after Russia.
- After the US sanctions of 2018, Iran economy faced serious problems as Iran’s fossil fuels contribute more than 53 percent of the country’s exports and account for close to 15 percent of its GDP.
- The US sanctions come at a time when Iran is trying to diversify its way out of its oil exports and increase its non-oil exports to 15 percent of GDP by 2020 as part of its Sixth Development Plan targets.
- Following the lifting of sanctions in 2016, Iran experienced a rise in GDP growth rate from – followed by a consistent decline in inflation. However, the sanction has not caused an adverse effect in the job sector because of the volatility of economic growth.
- The US withdrawal from JCPOA also impacts the relationship of Iran with Pakistan. The future of the Iran-Pakistan Gas Pipeline project, or the Gas Sales Purchase Agreement, that was signed in 2009 remains uncertain
Global implication of US withdrawal from JCPOA deal
- Oil prices are likely to rise and could lead to volatility in financial markets.
- The withdrawal can give US an upper hand while negotiating with North Korea on nuclear agreements.
Impact of US withdrawal from JCPOA on India
- Iran is India’s third biggest supplier (after Iraq and Saudi Arabia) of crude oil, and any increase in prices will hit inflation levels.
- It could destabilise middle east (west asia) region where over 8 million Indian migrants live and work.
- In February 2018, India had committed itself to increasing its oil imports from Iran, which were expected to double in 2018-19 from 2017-18.
- Indian interests in Afghanistan and West Asia are at stake after US pulling out of the JCPOA.
- India is aiming to develop Shahid Beheshti Port in Chabahar to circumvent Pakistan’s blocks on trade with Afghanistan. India has already committed $85 million with plans for total of $500 million for the port. New US sanctions may slow or even bring those plans to halt.
- India is a founder member of International North South Transport Corridor (INSTC) which is a is a 7,200-km-long multi-mode network of ship, rail, and road that starts from Iran. Plans for INSTC gathered momentum after the JCPOA was signed in 2015. New US sanctions threatens strictures on countries doing military trade with US’s adversaries such as Russia, North Korea and Iran.
- India had joined Shanghai Cooperation Organisation (SCO) and Iran proposal for induction into eight-member Eurasian security organisation was on the lie. If the proposal is accepted, India will become a member of bloc that will be seen as anti-American.
- India has long been proponent of rules-based order that depends on multilateral consensus and adherence to commitments made by countries on the international stage. This rules-based multilateral order has been breached by US by walking out of JCPOA. India will have to consider new understanding of its ties with US in this context for its interests.
- In addition, USA’s Countering America’s Adversaries Through Sanctions Act (CAATSA), which targets countries doing business with Iran, North Korea and Russia, will also affect India’s energy cooperation with Iran.
Beneficiaries of a JCPOA collapse
- One of the beneficiaries is Israel which has led lobbying efforts against the JCPOA in USA.
- Tensions with Iran unite Israelis nationally by pushing Israel into a state of emergency mode that will remove the focus from other issues currently affecting Israel, such as its occupation of Palestinian territory.
- Political and sectarian tensions between Iran and the Saudis have heightened drastically over the past five years due to the ongoing war in Iraq and Syria, the Saudi campaign in Yemen etc.
- Moreover, the JCPOA enabled Iran to re-emerged as a major regional oil competitor of Saudi Arabia.
- Now, a failed JCPOA would permit Saudi Arabia to use the backing provided by the United States, the EU, and Israel to re-isolate the Iran from the rest of the world for their own benefit.
Radical conservatives in Iran
- A JCPOA failure would strongly weaken Iranian government’s ability to enact his moderate and progressive policy agenda.
- Since blame for the sabotaged deal would fall equally on the United States and the EU, Iran would not be encouraged to pursue further implementation of its side of the agreement.
Policy recommendations for India
India’s approach to mitigating the negative impacts of the US withdrawal from JCPOA should be phased, starting with negotiations with the US and, if failed, looking at other options along with Russia, China, and the European Union.
- India should seek waivers from US secondary sanctions (penalizing country who trade with Iran) when it comes to the purchase of crude petroleum. One way through which this can be achieved is through issues linkages: increase in purchase of US shale oil, as well as softening India’s positions on US tariffs, in return for sanctions waivers.
- India should aggressively promote the cause of the Chabahar port in USA, and link the success of the port projects with that of US’s Afghanistan policies. Active Chabahar will allow Afghanistan to trade with the rest of the world without depending on Pakistan. This, in turn would reduce the influence of Pakistan in determining the future of Afghanistan which is crucial for India for security purpose. Furthermore, India should sensitise US to the fact that, absence of India in Chabahar may tempt Iran to link the port with China’s Belt and Road Initiative, an outcome that is undesirable for the US.
- It Indian efforts to the US about Chabahar port fail, India should look towards other partners in developing the port. A prime candidate here would be China. Following the Wuhan summit in April 2018, India and China have agreed to jointly develop an economic project in Afghanistan.
- If talks with china fail, India can talk to Russia. Russia has remained committed to the idea of promoting alternative institutional structures that undercut US and western dominance. In particular, it has proposed the creation of an alternative to the SWIFT payment messaging system. The existence of such an alternative could mitigate some of the problems caused by US secondary sanctions. India should be prepared to work with Russia to develop such alternatives.
- Finally, India should be vocal in its support of the French and German positions on the JCPOA. All said and done, if the net result of the US pull-out from the nuclear agreement is Iran eventually acquiring nuclear weapons, this changes the regional security calculus quite dramatically, and in a way that is to India’s detriment. Therefore, India should be willing to partner with EU states to promote the JCPOA. However, it should also be cognizant of the realpolitik of such a stance: India should express support for the EU positions only if it is certain that the US will not make any special concessions for India when it comes to New Delhi’s interests in Iran.
- The Iran deal was signed in 2015 after years of tension over Iran’s alleged efforts to develop a nuclear weapon.
- By withdrawing from JCAPO, US entered in a precarious position with key European allies potentially opening the door for Iran to pursue nuclear weapons far sooner than the nuclear deal would’ve allowed.
- Iranian leaders are threatening to produce more enriched uranium, which could be used to make nuclear weapons, unless other parties to the deal protect its economy from US sanctions.
- In nutshell, a more reliable, firmed commitments, transparency to audits and mutual agreement among world powers with middle east is the need of the hour to solve Iran issue.