Iraq Hostage Crisis: Diplomacy and INS Vikramaditya

The abduction of more than 40 Indians by the jihadis belonging to the Islamic State of Iraq and Syria (ISIS) or Islamic State of Iraq and Levant (ISIL) is the most significant development during this Sunni surge in Iraq and the region. Of all the extra-regional countries having geopolitical interests in the region, India’s stakes are the highest. In recent years, Iraq has emerged as the second largest supplier of crude to India. This primarily was engendered by the US sanctions on Iran, which from being the second largest supplier, after Saudi Arabia was pushed to the fourth. The data below[i] gives the shift from Iran to Iraq, arising mainly out of our compulsions of accommodating the US strategic imperatives in West Asia:-

The capture of some Iraqi oilfields by the ISIS jihadis could impact on the energy security of India. It may be underscored that Iraqi crude supply to India was on a ‘nomination’ rather than ‘open bid’ basis. It must be stressed that India is the fourth largest energy consumer in the world. The energy import bill of the country has been spiraling because of increased demands and various other avoidable factors such as NGO imposed slowdown in coal mining. Despite huge reserves of coal, in the last fiscal year, India imported coal worth USD 14 billion. Nuclear power projects have also been affected by externally funded NGO activism. For India’s energy basket the overwhelming dependence on oil imports is likely to persist at least in middle term perspective.

For an energy deficit country like India, an increase of $ 1 per barrel in the price of crude oil, can have an impact of Rs 25,000 crore in the budget. As per the Hindustan Times, dated 19 June 2014, an increase of one dollar increases the subsidy bill by Rs.7,500 crore. Therefore, an increase in oil prices, which could go up to $120 a barrel, can have a deleterious impact on the new government efforts to bring down inflation. Some analysts aver that there is a conflict between Indian interests and the Saudi interests with regard to oil prices. For India’s economic stability the price of crude needs to be at $98 per barrel or below. On the contrary, India’s largest supplier Saudi Arabia has the compelling interest of maintaining the price at $104 per barrel, below which its budget deficit could become unmanageable. Thus, the Iraq crisis severely impacts India’s crude imports from its largest and second largest supplier.

The question of the abduction of more than 40 Indians may not remain confined within the geopolitical space of Iraq. It has ramifications for the estimated seven million Indian expatriates in the Gulf region. The objective of the ISIS is to establish an Islamic caliphate in the region. It has not only Northern Iraq under its control but also a swathe of territory in Syria. If the momentum is not checked, these jihadis may well make the Gulf Sheikhdoms capitulate, as most of these country entities have little capacity to meet the jihadi onslaught without external assistance. If the lives or well-being of the Indians are jeopardised by the ISIS, the Gulf States may not be in a position to ameliorate their condition. It could well trigger an exodus.

Economically too, the consequences could be severe for India. The seven million expatriate Indian workers are a source of remittances amounting to USD 30 billion per year. Therefore, the Gulf Cooperation Countries (GCC) are not only principal source of India’s hydrocarbon imports but will remain critical to India’s wellbeing. There has been much emphasis on India’s ‘Look East Policy’ but it needs to be balanced by the ‘Look West Policy’. India’s trade with Asia is expected to reach $ 100 billion shortly, but may cross double this mark during the same period with the GCC counties. There is great potential in the Gulf for sourcing FDI, which remains underutilised. The evolving geopolitics in the region seems to be headed towards a deep and unbridgeable Shia-Sunni fault-line. This is bound to have an impact on the Muslim population in India. This fault line has taken murderous form in our neighbourhood in Pakistan.

This dire situation in the region has been the consequence of US intervention in Iraq by way of ‘Operation Iraqi Freedom’. Following ‘Operation Enduring Freedom’ in Afghanistan, most of the al-Qaeda had melted with the core leadership moving into Pakistan and some to Iran. However, the US intervention in Iraq, in effect provided safe havens and recruiting ground for the al-Qaeda in the Sunni dominated North. Even as the debate rages regarding the nature of the ISIS, the basic fact remains that it belongs to the Sunni-jihadi discourse engendered by the US invasion of Iraq. Subsequently, the al-Qaeda type groups proliferated when the so-called ‘Arab Spring’ descended on the region. This weakened the institutional capacities of eminently functional states, thus imparting impetus to jihadi groups and discourse. In Syria, the al-Nusra, a group owing allegiance to al-Qaeda found indulgent benefactors like the US and Turkey. The Russian intervention in Syria foiled the US and Saudi Arabia’s designs of toppling the Assad regime. The US did not take kindly to this slight. Meanwhile, the tentative US-Iran rapprochement has compelled Saudi Arabia to harden its Sunni discourse in the region.

The ISIS cannot sustain without external aid and abetment. Whether the design is to create a permanent cleavage and create two distinct Shia and Sunni regional blocks in West Asia is not known, but its possibility cannot be ruled out. It cannot be denied that the US posturing towards West Asia has undergone dramatic change since the country has struck massive ‘shale gas’, propelling the US as potentially the largest exporter. This gas can only find market, if it supplants crude oil.

These are the larger energy games being played out in the West Asia.  Nevertheless unlike the West, India has more than economic stakes in West Asia. It is religious, social and civilisational as well. The present hostage crisis therefore should be accordingly dealt with. One cannot intervene in a sovereign state without invitation, as it has long-term consequences, especially in context of West Asia where long term energy imperatives are involved. Nevertheless, a mix of diplomacy backed by demonstration of military muscle (not intervention) can achieve the desired results. What good is INS Vikramaditya for, if it cannot support Indian diplomacy at this critical period and that too in the region?

The author is a Delhi based defence analyst. Views expressed are personal.