US-Iran war flares up again, putting India in a fresh geopolitical bind

In our headlines this week, the US-Iran war, instead of winding down, appeared to return to full-fledged hostilities, renewing uncertainties that have simmered for weeks.

According to multiple news reports, the US and Iran exchanged their biggest barrage since July, with Washington striking Iran’s southern coast and Tehran firing on US bases across the region.

The exchange stoked fears in other Gulf countries that have been targeted by Iran in the past in response to US attacks.

The US military said the targets included Iranian air-defence and radar systems, maritime assets, mine-clearing capabilities and communications sites. Iran reported strikes on multiple targets near the Strait of Hormuz, including Larak Island. Some reports also said the US had struck Iranian tankers in the strait.

The flare-up threatens to deepen a conflict that began in February, disrupting global energy supplies and raising fuel costs in the US and elsewhere. In the US, opposition to the Iran war among a majority of Americans could also complicate the prospects for President Donald Trump’s Republican Party ahead of November’s congressional elections.

On 2 September, oil prices reportedly rose about 1% amid concerns over further disruption to energy supplies. Brent crude futures gained 98 cents, or 1%, to settle at $95.63 a barrel, while US West Texas Intermediate crude futures rose 79 cents, or 0.9%, to $91.01.

President Trump, speaking to reporters in the Oval Office, said the latest strikes on Iran were aimed at crippling its ability to build a rocket capable of dropping mines, and claimed the US had destroyed that capability. Given the number of similar claims made by Trump in the past, reader scepticism would hardly be unwarranted.

The US military, for its part, said the latest strikes were retaliation for recent attacks on American forces and maritime traffic in the region.

So, who is one to believe about the real trigger for the latest strikes? And wasn’t it only last week that Washington announced a strategy of maximum economic pressure on Iran to compel Tehran to fold?

Dubbed “Operation Economic Outcast”, the strategy is described by the US as an unprecedented, whole-of-government economic campaign against Iran and “its enablers”. By enablers, Washington means those who trade with Iran.

Pressure, but no let-up

Iran, meanwhile, said it struck US assets in Bahrain, Jordan, Kuwait and Iraq in retaliation for the American strikes. Its stated aim now is to uproot US forces from the intricate network of military bases they have maintained across the West Asia for decades.

Iran also claimed to have killed US forces in Jordan and at a base in northern Iraq, something Washington has denied.

A 3 September report suggested that the US campaign to squeeze Iran’s economy by disrupting oil exports and sanctions evasion was becoming increasingly difficult for Tehran to withstand, citing three unidentified Iranian sources.

The costs of the conflict are also being borne by the people fighting it. There were reports that the USS Abraham Lincoln, which had been deployed to West Asia, docked at a port off Thailand for some much-needed rest and recuperation after a record 286-day deployment. It was among the longest deployments for Carrier Strike Group 3 in recent memory and has raised concerns about the psychological health of the roughly 5,000 military personnel on board.

It is a reminder that the pain of war is felt on all sides, albeit in very different ways.

Other reports said Trump’s aides are working overtime to prevent the Iran war from escalating ahead of November’s midterm elections, amid concerns about Republican losses. Yet this week’s barrage has complicated that effort. The administration’s political calculus, according to these reports, appears to involve containing the conflict until the 3 November vote and potentially escalating afterwards.

India walks a tightrope

It was against this backdrop that Prime Minister Narendra Modi renewed his call for Indians to avoid overseas leisure travel and buying gold. He also urged citizens to support self-reliance and avoid hosting overseas destination weddings, in a video posted on Instagram while attending the Shanghai Cooperation Organisation (SCO) summit in Bishkek, Kyrgyzstan.

The objective is clear enough: keep India’s economy as steady as possible amid mounting external uncertainties.

For the uninitiated, the SCO began as the Shanghai Five in 2000 and has since expanded to 10 members, two observer states and 15 dialogue partners. The China- and Russia-led grouping met in Bishkek this week, on 31 August and 1 September, and condemned “military strikes on the territory of the Islamic Republic of Iran, which have resulted in numerous civilian casualties and significant damage to the country’s economy.”

Iran is an SCO member, and President Masoud Pezeshkian attended the summit. The SCO said the US-Israel attacks on Iran “violate the principles and norms of international law and the UN Charter and create serious risks to international peace, security and stability.”

There are few surprises here. The SCO is a China- and Russia-led grouping that is sometimes seen as an alternative to Western-led institutions.

China and Russia have their own reasons for calling out US actions against Iran: Russia amid its confrontation with the West over Ukraine, and China amid its disputes with the US over Taiwan and the South China Sea, besides their broader strategic rivalry.

India, too, signed the SCO joint statement.

And now the focus shifts to the BRICS summit, which India will host in New Delhi on 12-13 September.

All eyes on BRICS

The big question is whether BRICS will manage to produce a joint statement — and, more importantly, whether it can find common ground on Iran.

BRICS now includes Iran, as well as the United Arab Emirates and Saudi Arabia, whose positions on the conflict do not necessarily align. Differences between Iran and the UAE had already held up joint statements at the end of preparatory meetings ahead of the summit.

Will the summit face the same challenge? Or can Indian negotiators pull off another diplomatic balancing act, as they did at the 2023 G20 summit, when India managed to produce language acceptable to both the US and Russia despite their deep differences over Ukraine?

It is a wait-and-watch situation, with perhaps a few fingers crossed.

That matters not just because of Iran. BRICS is already in Trump’s crosshairs over, among other things, possible moves by the grouping to reduce reliance on the US dollar in trade.

Delhi’s Iran dilemma

One of Modi’s key meetings in Bishkek was with Iranian President Masoud Pezeshkian. The 31 August meeting was the first top-level interaction between the two leaders since the war began in February.

“Reiterated our commitment to strengthening India’s long standing friendship with Iran across diverse sectors. We want to expand and diversify our trade basket in the times to come. We had a discussion on the prevailing situation in the region. India will continue to support all efforts aimed at ensuring lasting peace,” Modi posted on X after the meeting.

The comment is particularly interesting in the context of Washington’s campaign of maximum economic pressure aimed at throttling Iran’s economy.

Reports from Bishkek said Modi and Pezeshkian also discussed the Chabahar port project, although the precise details were unclear.

Chabahar is the port India first announced plans to develop in 2003, with the aim of bypassing Pakistan and gaining access to Afghanistan and Central Asia. But India’s plans for the port have repeatedly been caught up in tensions between Washington and Tehran, particularly because of successive rounds of US sanctions against Iran.

The Modi-Pezeshkian meeting naturally attracted attention in Washington.

US Secretary of State Marco Rubio on 2 September said he did not think India and Iran were discussing a trade deal. Many countries around the world, he added, maintain contact with Tehran.

“I mean we.ve met with elements of the Iranian regime as well, in terms of some of these discussions that have occurred and there’s been contact with them,” Rubio said during an interview on The Brian Kilmeade Show on Fox News Radio, in response to a question about the Modi-Pezeshkian meeting.

“No country should be out there helping them create mechanisms by which they can generate revenue that they will then use to sponsor terrorism and try to build a nuclear weapon. And if countries decide to do that, then we're going to have to sanction them too,” he added.

Not a threat, perhaps. But certainly a warning.