Deal or no deal?
- The Joint Comprehensive Plan of Action aka Iran Nuclear Deal was an agreement signed between the P5+1(China, France, Russia, United Kingdom, United States of America + Germany) and Iran in order to remove the economic sanctions against Iran for their agreement in denuclearization.
- This was signed in 2015 but the US unilaterally withdrew from it in 2018.
- To keep the deal alive, the other parties to the deal started a barter system called INSTEX to allow trade with Iran outside the US banking system. However, INSTEX covers only food and medicine, even though they are already exempt from US sanctions.
- Iran agreed to significantly cut its stores of centrifuges, enriched uranium and heavy water, all key components for nuclear weapons.
- Iran also agreed to allow inspectors from the International Atomic Energy Agency (IAEA) to access its nuclear sites to ensure they won’t develop weapons in secret.
- The Western countries agreed to lift sanctions related to Iran’s nuclear proliferation, however sanctions imposed due to alleged human rights violations and Iran’s ballistic missile program were not removed.
- While US agreed to lift sanctions on oil exports, they continued to restrict financial transactions, which have impacted international trade with Iran.
Significance of the deal to India:
- India’s investments in Iran, including Chabahar Port, International North-South Transit Corridor (INSTC), and other connectivity projects.
- India is hoping to use this to create an alternate route connecting to Central Asia bypassing Pakistan to gain access to the heartland of Asia.
- Though the oil imports from Iran have been curtailed due to sanctions under laws such as Countering America’s Adversaries Through Sanctions Act (CAATSA), the removal of sanctions will give India another venue for cheap oil imports.
To learn more about JCPOA Click Here