Saudi-Iranian normalisation and implications for India – Explained, pointwise

Introduction 

Saudi and Iranian officials recently agreed to revive the 2016 Saudi-Iran peace deal. China-initiated two-way discussions in Beijing resulted in the Saudi-Iranian normalisation. The rivalry between these two countries has long been a source of instability in the region, and the potential normalisation deal has been a topic of speculation in recent years.

Although this deal could be complex and challenging to implement, it could have significant implications for global stability and economic growth, including India. 

What are the conflicts between Iran and Saudi Arabia? 

The conflict between Iran and Saudi Arabia has several root causes and has been ongoing for decades. Some of them are:  

Religious differences: Iran is a predominantly Shiite Muslim country, while Saudi Arabia is predominantly Sunni Muslim. The two sects have different beliefs and practices, and this has led to tensions and conflicts between the two countries. 

Political influence: Both Iran and Saudi Arabia are major powers in the Middle East and have sought to increase their political influence in the region. This has led to competition and conflicts over issues such as control of oil resources, support for different political factions and proxy wars in countries like Yemen, Syria and Iraq. 

Ideological differences: Iran is an Islamic republic with a revolutionary government, while Saudi Arabia is an absolute monarchy with conservative religious values. These ideological differences have contributed to tensions between the two countries. 

Historical grievances: Iran and Saudi Arabia have a long history of animosity, dating back to the early days of Islam. They have been involved in conflicts and power struggles for centuries. 

Oil Prices: Iran and Saudi Arabia are both major oil producers, and their competition for market share has led to disagreements over production levels and prices. This has further strained relations between the two countries, particularly as oil prices have fallen in recent years. 

The assassination of a famous Saudi journalist: The killing of a Saudi journalist and dissident in 2018 was allegedly carried out by Saudi agents. This has further soured relations between the two countries. Iran has condemned the killing and accused Saudi Arabia of human rights abuses. 

About the Saudi-Iranian normalisation deal  

The key outcomes of the Saudi-Iran peace deal are, a) Both countries plan to reopen their embassies in Riyadh and Tehran, b) Both countries will respect the sovereignty of other countries and not get involved in each others business. For example, Saudi Arabia agreed to rein in Iran International, a satellite news channel. On the other hand, Iran has agreed to curb cross-border attacks on Saudi Arabia by Houthi rebels in Yemen, c) Agreed to implement a security cooperation agreement signed in 2001 and a general economic, trade, and investment agreement signed in 1998.

Apart from these measures, both countries will also get together to work out the details of the peace deal.

China will organise a conference between Iran and the six Gulf monarchies to help maintain peace in the region.

What are the various diplomatic challenges in implementing the Saudi-Iranian normalisation deal? 

Reviving the Resolving regional tensions: There are ongoing rivalries and conflicts in the region, particularly between Saudi Arabia and Iran, that require diplomatic efforts to manage and reduce tensions. 

Reviving the JCPOA: The Joint Comprehensive Plan of Action (JCPOA), a nuclear agreement with Iran, needs to be revived and renegotiated to ease sanctions and address concerns about Iran’s nuclear program. However, domestic politics in the US and Israel could pose challenges to this process. 

Managing Israel’s aggressiveness: Israel’s actions in the region, particularly its hostility towards Iran, need to be managed to ensure regional stability. 

Engaging with China: China’s growing role in West Asian affairs poses challenges for Indian diplomacy. India needs to engage with China in the region and work together to further mutual and regional interests while also prioritizing the management of its ties with China. 

What are the  Global Implications of Saudi-Iranian normalisation? 

Some of the potential implications of Saudi-Iranian normalisation are: 

Regional stability: The two nations are involved in conflicts in Syria, Yemen, and Iraq, among other places. Normalisation could lead to a de-escalation of these conflicts and a reduction in regional tensions. 

Global energy markets: Saudi Arabia and Iran are two of the world’s largest oil-producing nations, and their relationship impacts global energy markets. Any agreement between the two nations could affect the price of oil and gas globally. 

Religious divide: The Sunni-Shia divide has been a source of tension between Saudi Arabia and Iran, and it has fueled conflicts in the region. The Saudi-Iran peace deal could help ease this divide and reduce religious tensions. 

Relationship with U.S.: Saudi Arabia and Iran have different relationships with the United States, and normalisation could affect the U.S. policy towards the region. For example, The US, which traditionally held significant power in the region, has deprioritised West Asia due to bigger foreign policy challenges such as Russia’s war in Ukraine and China’s rise in the Indo-Pacific. 

Geopolitical balance: Saudi Arabia and Iran are two of the most influential countries in the Middle East, and their normalisation could shift the balance of power in the region. 

China “quasi-mediation diplomacy”: China has signaled a shift in its approach towards the Middle East. It is moving away from hard security concerns towards “quasi-mediation diplomacy”. The strategy aims to promote China’s commercial, diplomatic and political interests. The recent Saudi-Iran accord is the first manifestation of this approach, reducing regional tensions and paving the way for further dialogue.  

Good for Afghanistan: The successful completion of the Chabahar-Helmand-Kabul-Termiz railway line will open the vast and resource-rich Central Asian region to the Global South. 

What are the Implications of Saudi-Iranian normalisation for India? 

Energy security: India is one of the biggest oil consumers in the world. Most of the oil imports come from the Middle East, especially Saudi Arabia and Iran. The Saudi-Iran peace deal could help reduce tensions in the region and could lead to a more stable oil market. This will be good for India’s energy security.

Apart from this, discussions for the transportation of Iranian gas to India and Turkmen gas to Afghanistan, Pakistan, India, and Bangladesh could be restarted. 

Trade and Investment: Improved relations between Saudi Arabia and Iran could lead to increased trade and investment opportunities for India, as both countries are important trading partners for India. This could result in greater economic growth and job creation in India. 

Regional stability: The normalisation of relations between these two countries could lead to a reduction in tensions and potentially help resolve some of the conflicts in the region. This would be beneficial for India as it has a significant interest in maintaining regional stability. For example, India support for International North-South Transport Corridor (INSTC), and Iran is also part of India’s extended neighbourhood. 

Geopolitics: India has good relations with both Saudi Arabia and Iran and has been trying to maintain a balance between the two countries. The normalisation of relations between Saudi Arabia and Iran could change the dynamics of the region, and India will need to navigate the new realities to maintain its interests in the region. 

China angle: India may face difficulties as a result of China’s efforts to mediate tensions between Iran and Saudi Arabia. 

What can be done to fully reap the benefits of the Saudi-Iran peace deal?

Confidence-building measures(CBM): Both countries could take steps to build confidence and demonstrate their commitment to reducing tensions. This could include diplomatic gestures, such as opening embassies or exchanging visits between officials, as well as practical steps, such as reducing military deployments or easing economic sanctions. 

Diplomatic negotiations: After CBM, both could engage in formal negotiations to work out the details of a potential normalisation deal. This could involve mediation from third-party countries or international organizations to help bridge the gap between the two sides.

For example, India can play a constructive role in promoting dialogue and cooperation between these two countries, which can help in achieving regional stability. 

Addressing sensitive issues: A normalisation deal between Saudi Arabia and Iran would likely require both sides to address sensitive issues, such as regional security arrangements and Iran’s nuclear program. These issues would need to be tackled in a way that addresses the concerns of both sides and promotes mutual trust and cooperation. 

Building public support: A normalisation deal between Saudi Arabia and Iran would need to be supported by both societies, as well as by the broader international community. Therefore, efforts to build public support and engage civil society actors would be critical to the success of any potential deal. 

India will need to carefully monitor the situation and adapt its policies accordingly to maintain its interests in the region. 

Syllabus: GS 2 – International Relations – Effect of policies and politics of developed and developing countries on India’s interests.