India is clearly caught in a bind if one were to go by its official response — slow and delayed and, even by diplomatic standards, quite evasive. The government has been careful and deliberate about staying silent with regard to the elimination of the top Iranian leadership, including the country’s supreme leader Ali Khamenei.
In a scathing and incisive article, UPA chairperson and Congress leader Sonia Gandhi questioned the government’s silence and characterised it as an abdication and not being neutral. The foreign policy under Narendra Modi is perceived to be leaning more towards new friend Israel than old and time-tested and trusted ally Iran. It is not clear how it will pan out or unravel. Be that as it may, the government in its wisdom chose to focus on the safety and well-being of civilians, including almost one crore Indian citizens who live and work in the Gulf region.
In the past, from Manmohan Singh to Narendra Modi, Indian prime ministers have ordered successful evacuation missions. While Manmohan Singh did it efficiently and quietly, leveraging diplomatic channels and institutions, Narendra Modi did so in his characteristic style, involving highly visible missions with nationalistic overtones. Once again on the agenda is the safety, and if necessary and if possible, the evacuation of Indian nationals from Gulf countries, but New Delhi is acutely aware of the constraints which make any “mission” not only complex but also a daunting challenge.
The Ministry of External Affairs statement refers to the country’s trade and energy supply chains which traverse the region and how any major disruption will have serious consequences for the Indian economy. To address the growing anxiety regarding energy security, government sources told the media that the country has adequate crude and oil stocks that will last 50 days and is actively looking at other options.
If the conflict drags on, India could exploit the situation to source Russian oil and Moscow is more than willing and ready to oblige. But how will India manage this without rubbing the United States on the wrong side is the question. New Delhi might be hoping that Washington could take a kinder view and be more accommodating given the situation where it would argue that its imports are for domestic consumption and not for re-export. Luckily for India, European Union members too might want to source Russian oil in the wake of supply disruptions due to West Asia conflict.
Besides diplomatic challenges, if the conflict intensifies and further expands, India could be staring at a situation wherein the economy’s Goldilocks moment of high growth and low inflation could be lost and it would take time to recover from the setbacks and it is uncertain if the ideal situation would be restored in future. Secondly, the adverse impact on Indian companies would in turn hit stock markets threatening losses to retail investors.
Likewise, the declining Indian rupee could weaken further. Inflationary and other pressures are likely to have political side effects which the Modi government can ill afford, especially when there is a perceptible increase in discontentment against it and with crucial assembly elections in the offing. The challenges and crises on multiple fronts — namely, diplomacy, economy and domestic politics — are going to test the government’s bandwidth, especially when the world and Indian people would be watching how it acquits itself.