K.C. Singh | As US & Iran Strike Deal, Will India Heed Lessons?

Coinciding with the 80th birthday of President Donald Trump late on June 14, a deal was eventually struck between the United States and Iran. Pakistan’s Prime Minister Shehbaz Sharif revealed that a memorandum of understanding (MoU) would be signed in Geneva on Friday, June 19.

President Trump also posted on social media that the Strait of Hormuz was going to be opened and the US naval blockade would be withdrawn immediately. The details of the MoU could not obviously be immediately released until the signing, but some aspects began to emerge from background briefings.

Apparently, there are two phases involved in the agreement. During Phase 1, the war is supposed to end, not only between United States and Iran but also regionally, including in Lebanon. Also, the Strait of Hormuz is to be promptly opened, with Iran not levying any tariffs during the 60-day period, kept for technical negotiations.

Phase 2 involves the two sides implementing the undertaken commitments. The US has to demonstrate non-interference in the internal affairs of other states, besides respecting their sovereignty. There would also be no increase in US troops deployed in the region. Iran, on the other hand, commits to observe its obligations under the Nuclear Non-Proliferation Treaty (NPT), to which it is a signatory.

Iran also reiterates its commitment to not acquire nuclear weapons. The United States will transfer half of the frozen Iranian funds, amounting to $12 billion, during this period. The remainder would be dispersed in the 60 days, after the 30-day initial negotiations are over. A sanctions waiver for Iran, to export oil, gas and petrochemicals, would also be available during that follow-up period. The US would also take up with Israel the full withdrawal of all its defence forces from Lebanon, including implementation of commitments that Israel undertook in 2024 in its deal with Hezbollah.

Also, during the 60-day follow-up period, a $300 billion reconstruction fund for Iran, to which the Gulf states would also partially contribute, would be initiated.

Talks would then address the withdrawal of all resolutions of the UN Security Council and the IAEA which imposed sanctions or restrictions on Iran.

The details may vary as they emerge when the MoU becomes public after its signing on June 19. But globally, leaders are by and large reacting mostly positively. The exception being the Israeli Prime Minister, Benjamin Netanyahu, who has apparently sought an appointment with President Trump. His national security minister Itamar Ben Gvir said that “Trump’s agreement does not bind us”, because Israel is an independent and sovereign country. He also added that Israel would not withdraw its forces from Lebanon.

US vice-president J.D. Vance explained that removal of the Iranian sanctions depends on Iran undertaking the supervised disposal of its stock of enriched uranium. He also confirmed that Iran is likely to receive $300 billion as war damages.

President Trump separately announced that the MoU was being electronically signed by the US vice-president, J.D. Vance, and the Iranian Speaker, Mohammed Bagher Ghalibaf.

The extent to which the US-Iran deal can be implemented will only be known over the next 90 days as the negotiations try resolving the conflicting core interests of both sides. The external challenge will come from Israel as it comes under US pressure not to sabotage the deal. Israel’s PM Benjamin Netanyahu faces an election to the national Parliament, the Knesset, on October 27, a week before the crucial mid-term elections in the United States. The outcome of both elections would determine the future course of diplomacy or war in West Asia and the Gulf.

The defeat of the Republicans in the US and the ruling far-right coalition in Israel would indicate a public rejection of the nationalistic polarising politics in both nations.

Even if the peace deal gets implemented, the world may not return to its pre-war traditional global order. From the moment President Donald Trump began his second term in January 2025, he has disrupted the post-World War II global order. He replaced multilateralism with unilateral activism and the use of force to achieve strategic objectives. He has weakened global institutions like the World Health Organisation by withdrawing from them. His arbitrary imposition of tariffs undermined the global trading system overseen by the World Trade Organisation. And then came the military attack on Iran to overthrow its regime and seize its enriched uranium. The strategic consequences of that may leave a lasting impact. The six-member Gulf Coordination Council is today a divided house. Pakistan Prime Minister Shehbaz Sharif thanked Saudi Arabia, Turkey and Qatar, conspicuously omitting Bahrain, the UAE and even Oman. This indicates that the states which had signed the Abraham Accords -- Bahrain and the UAE – now stand isolated in the Gulf.

The diplomatic options for India also stand constrained due to it leaning conspicuously towards the US-Israel-UAE axis. The winners, besides Iran, are Pakistan and China. Pakistan and especially its Army chief, Field Marshal Asim Munir, have a direct line open to the US President. Hence, the Indian policy of isolating Pakistan diplomatically as well as militarily deterring it faces new questions.

As the situation in the Gulf returns to normal, India will have to work assiduously to reestablish trust with all the members of the GCC and Iran. Just as Israel is feeling abandoned by the exit of the US from the war with Iran, even India will have to reassess the damage done to its relations with many Gulf nations due to abandonment of its strategic autonomy.

The upcoming period of initial discussion for 30 days, followed by 60 days of more intensive negotiations, provides India with the time and space for quickly supplementing our imports of oil, gas and fertilisers. India should also begin adopting a more balanced stand between the United States and Iran, as well as towards Israel. Israeli Prime Minister Benjamin Netanyahu spoke to the media, immediately after the US-Iran deal was reached. He repeatedly emphasised the gains made by Israel in neutralising the Iranian nuclear programme and damaging Iran’s strategic capabilities. This was clearly an attempt to woo the Israeli public as the peace deal is domestically seen as a big setback for the Israeli government.

The diplomatic lesson for the Indian government is obvious. Blindly aligning with one party in a regional conflict, based on shared religio-ethnic ideologies or a desire to please any global power, invites an unnecessary risk.