Context

The latest round of indirect talks between Iran and the United States resumed in Vienna, with Tehran focused on getting U.S. sanctions lifted again, as they were under the original bargain, despite scant progress on reining in its atomic activities.

Background

• Iran’s nuclear ambitions have been a focus of international diplomacy for decades. 
• Faced with accusations of nuclear weapons pursuits in violation of its NPT commitments, Iran concluded a 2015 agreement.
• The deal officially called Joint Comprehensive Plan of Action (JCPOA) commonly known as the Iran deal was signed on July 14, 2015.
• It was signed between Iran, the U.S., China, France, Russia, the U.K., Germany, and the European Union.
  • P5 is the 5 permanent members of the UNSC (US, China, France, Russia, and the UK).

Key-Points The deal aimed at curbing Iran’s nuclear programme: Iran agreed not to build any more heavy water facilities. Eliminate its stockpile of medium-enriched uranium. Cut its stockpile of low-enriched uranium, and reduce the number of its gas centrifuges. In return, Iran will recover assets worth $100 billion frozen in overseas banks, and sanctions on the country by the U.S., the U.N., and the E.U. will be lifted.

• The United States reinstated economic sanctions on Iran after it abandoned the landmark nuclear deal in May 2018.
• Iran later breached many of the deal's nuclear restrictions and kept pushing well beyond them.

Analysis

Why did the US pullout from Nuclear Deals?

• As per the US administration, ‘one-sided deal’ did not bring calm and peace to the region.
• Iran’s rising economic profile would embolden it to increase its regional presence and would pose a strategic threat to the interests of the U.S.-Saudi-Israel axis.
• So, US decided to unilaterally pull it out of the Iran nuclear deal and to re-imposing nuclear sanctions against that country.

Why the talks are revived now?

• Negotiations to restore the 2015 agreement began earlier this year but stopped in June.
• They resumed in late November with the latest round getting underway in Vienna. 
• The aim is to bring back Washington, which left the deal in 2018, and curtail Tehran's nuclear activities, stepped up in response to the USwithdrawal and re-imposed sanctions.

What is Iran’s current nuclear activity?

• In response to the other parties’ actions, which Tehran claimed amounted to breaches of the deal, Iran started exceeding agreed-upon limits to its stockpile of low-enriched uranium in 2019, and began enriching uranium to higher concentrations.
• It also began developing new centrifugesto accelerate uranium enrichment; resuming heavy water production at its Arak facility; and enriching uranium at Fordow, which rendered the isotopes produced there unusable for medical purposes.
• In 2020, Iran took more steps away from its nuclear pledges, following a series of attacks on its interests.
  • In January, after the U.S. targeted killing of a top Iranian general, Qasem Soleimani, Iran announced that it wouldno longer limit its uranium enrichment.
  • In October, it began constructing a centrifuge production center at Natanz to replace one that was destroyed months earlier in an attack it blamed on Israel.
  • In November, in response to the assassinationof a prominent nuclear scientist, which it also attributed to Israel, Iran’s parliament passed a law that led to a substantial boost in uranium enrichment at Fordow.
• The following year, Iran announced new restrictions on the IAEA’s ability to inspect its facilities, and soon after ended its monitoring agreement with the agency completely.

Uranium stockpile in Iran According to a recent report from the International Atomic Energy Agency (IAEA), Iran’s stockpile of uranium enriched to 20 percent uranium-235 is 114 kilograms, up from 85 kilograms. The stockpile of uranium enriched to 60 percent U-235 is 17.7 kilograms, up from 10 kilograms.

What reasons could push Iran to sign a deal?

• Removal of sanctions: For Tehran, it is all about sanctions removal. Iran insists all US sanctions must be lifted before steps are taken on the nuclear side.
• Water crisis: The country’s worsening water shortage poses a severe short-term political risk.
• Climate change: Climate change poses an even more severe risk for the long medium and term.

Pre and Post Effect of JCPOA Prior of JCPOA Prior to the JCPOA, Iran’s economy suffered years of recession, currency depreciation, and inflation, largely because of sanctions on its energy sector. Lifting of sanctions With the sanctions lifted, inflation slowed, exchange rates stabilized, and exports—especially of oil, agricultural goods, and luxury items­—skyrocketed as Iran regained trading partners, particularly in the EU. After JCPOA After the JCPOA took effect, Iran began exporting more than 2.1 million barrels per day. However, these improvements did not translate to a significant increase in the average Iranian household’s budget. End of sanctions The end of sanctions waivers on oil exports and the restoration of U.S. sanctions in 2018 has once again cut deeply into a vital source of national revenue: oil and petroleum products account for 80 percent of Iran’s exports.

What does the world want?

• Nuclear physicists, military officials, non-proliferation experts, and more than 100 countries across the globe have all voiced their support for the Iran nuclear deal because it is the best solution available to prevent Iran from obtaining a nuclear weapon without taking military action.
• Russia and China: Russia and China share western goals, wanting to see the JCPOA resurrected and the avoidance of any renewed crisis in the region.
• Europe: All five countries who will be sitting around the table with Iran want a return to the full implementation of the deal along with the necessary lifting of US sanctions.
• United States: Washington backs a return to the JCPOA and expected Iran's new president to return to it after a suitable interval. However it seems to have badly misjudged the mood in Tehran. The United States says it was still too soon to say if Tehran had returned to the negotiations with a constructive approach.

How would it impact India?

Both the United States and Iran are strategically and economically important for India. Ideally, India wants to have good relations with Iran as well as the US. There are several ways India could be affected by this changing scenario:

• US, an indispensable partner: The US is clearly an indispensable partner for India for the future, in the context of new threats and challenges emerging in Asia. 
• Indo-US relation: The recent situation will affect the “strategic partnership” between India and the US as has asked. India to be more proactive in the Indo-Pacific, with an eye on China.
• Impact on Inflation: Iran is India’s 3rd biggest supplier, any increase in prices will hit inflation levels.
• Chabahar port: The Chabahar Port Project, along with the International North-South Transport Corridor (INSTC), has held a central position in India-Iran relations.

Conclusion

The eighth round of the Vienna talks in 2021 has provided an ideal blueprint with progress expected in achieving a successful closure to the Iranian nuclear issue.