India's Deepening Foreign Policy Dilemma
There are some well-established truisms in international relationships as they stand today. The US and Iran do not get along, to put it mildly. Realistically, they are bitter enemies. India and Iran, on the other hand, have been on reasonably good terms at least since the 70s, with the relationship mostly hinging on oil (Iran being the second largest source of oil for India). Increasingly, a new relationship is getting added to this mix – that of US-China rivalry. Until recently, this rivalry had been focused on economic and trade issues. The US routinely complained of China's manipulative behavior with regard to the Renminbi. This rivalry, however, took a more geopolitical turn late last year.
In August 2011, China announced that it had completed the refurbishment of an old aircraft carrier it had bought from the erstwhile Soviet Union and that it was now undergoing sea trials. This seemed to signal a change in China's ambitions as it set out to establish stronger naval presence in the region. Territorial disputes over the oceans have been on the rise as well. This was followed, a few months later, by a declaration by Hilary Clinton (Secretary of State of the United States) of the US intention to make a “strategic pivot” to the Asia-Pacific region. This has, almost universally, been interpreted to mean that the US will strengthen its military/naval presence in the region to counter China's apparent intentions. In January 2012, this intention was formalized in a Strategic Guidance document released by the Department of Defence.
In pursuance of this goal, the US intends to make India a “long-term strategic partner”. Essentially, the US would like to have India as a naval base. India is geographically extremely well-located, is well-respected and has a stable polity, making it an ideal choice. For India, this could be a great opportunity, if played properly. In return for supporting the US, India could demand the lifting of sanctions related to access to military technology. More fundamentally, India could demand US support relating to our issues with Pakistan and increasingly, with China. There is, however, a counter-consideration – Iran.

With the US withdrawing from the middle east, a power vacuum is being created in the area. A vacuum which could very well be filled by Iran. This would bring Iran in even sharper conflict with the US. Meanwhile, given how few friends Iran seems to have, if India sticks with them at this time, we could gain significant influence in the region. This is not to mention a continued supply of oil. On the other hand, for the US to strongly support India, it would definitely ask India to sever relations with Iran. China could then woo Iran, and we would lose our foothold in the middle east.
So the question really is this. Should we sever relations with Iran to side with the US, in return for US support to resolve our regional problems. We would, of course, not be equal partners in this quest. Or we could choose to focus on the middle east, secure our oil supplies and hope for a surge in Iran's clout in the region. Meanwhile, we'd be left to fend for ourselves against China. And in both cases, it is far from certain that we would get genuine support from our allies – the US in the first case and Iran in the second. What should we do?