When the U.S. slaps a nation with punitive sanctions, it tries to prevent not only American companies from doing business with the target country but also those of other states. Inevitably, these extraterritorial effects hit some countries much harder than others — as India has just found to its cost.
Even though New Delhi has been boosting ties with Washington for over a decade, it is a prime victim of two new sets of U.S. economic sanctions — on Iran and on Russia. These two countries, now at the center of the current American foreign policy debate, are both long-standing economic and political partners for India.
Since New Delhi cannot suddenly wind down the relationships with them without jeopardizing its national security, it must consider carefully how to balance those interests with its growing strategic partnership with the U.S., a top trading and defense partner of India. Washington, for its part, should give maneuvering space to India, a key player in the U.S.’s biggest geopolitical game in the Indo-Pacific region — reining in an increasingly muscular China.
Donald Trump’s unilateral withdrawal from the multilateral Iran nuclear deal, followed by his globally applicable sanctions to choke the Iranian economy, has prompted calls for defiance even from Washington’s close allies in Europe. The U.S. president’s latest offer of direct talks with Iranian leaders may signal a wish to strike a deal but he is a long way off from lifting sanctions.