Context

Recently, Iran carried out a series of air strikes on Israel using 200-300 drones and ballistic missiles.

Background of the Iran-Israel War

• These attacks were carried out by Iran’s para-military force “Iranian Revolutionary Guard Corps” in retaliation to Israeli war jets targeting an Iranian consulate in Syria earlier this month.
• Iran called the attack Operation True Promise.
• This is for the first time Iran has openly and directly attacked Israel. Before this, Israel had always alleged that Iran attacked through its proxy terrorist organizations Hamas, Hezbollah and Houthi rebels.
• The Iranian government also declared a prohibition on all vessels associated with the Zionist regime from navigating in the Oman Sea and the Persian Gulf. 
• Reaction by the World: Leaders from across the world have condemned the Iranian attack and called for immediate cessation of hostilities. 

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Arising Concern- A Possibility of an All-out War

• Depends on Israel: It depends on how Israel responds to this direct attack by Iran. 
  • A strong Israeli reaction risks pushing the two countries into an all-out war, possibly dragging the US into it. 
• Involvement of Other Countries: US and UK forces are already involved in this latest escalation. They have shot down Iranian drones over Jordan, Syria and Iraq.
• UN Reaction: The United Nations has called on Iran and Israel to show restraint, with the threat of a full-scale direct conflict between the pair looming over the Middle East.

How will the Iran Israel war impact the world?

• Economic Implications:

• • High Oil Prices: Crude oil, already trading near six-month highs, may cross $100 per barrel if tension worsens.
  • Disruptions to Supply-Chain: An all-out war will cause supply chain disruptions as Iran will execute its threat to shut down the Suez Canal. 
  • Threat of High Inflation: Global economic growth could fall below the 3.1% that the International Monetary Fund has projected for 2024.

• Challenge for International Diplomacy:

  • This conflict might impact the Iran nuclear deal talk. Also, any further escalation could hamper peace processes in the region.

• Impact on Global Political Alignments:

  • With the involvement of the US in support for Israel, there may be shifts in international relations such as Russia and China might support Iran.

• Regional Destabilization: 

• • Other countries such as Syria, Lebanon and Saudi Arabia could be drawn into a broader conflict.

Iran-Israel Relations

• Iran was one of the first countries in the region to recognise Israel after its formation in 1948. It was only after 1979 that their diplomatic ties ended.
• Pre-1979 Iran-Israel Ties: In 1948, the opposition of Arab states to Israel led to the first Arab-Israeli war. Iran was not a part of that conflict, and after Israel won, it established ties with the Jewish state. It was the second Muslim-majority country to do so after Turkey.
• The 1979 Revolution: A religious state was established in Iran after the Shah was overthrown in the 1979 Islamic Revolution. The regime’s view of Israel changed, and it was seen as an occupier of Palestinian land.
• Iran’s Relations with Egypt: Egypt’s leader Nasser had long championed the idea of “pan-Arabism” in the region, for the cultural commonalities between the Arab states to be translated into larger solidarity and unity. This put Iran, a non-Arab country, at odds with it.
  • However, with the death of Nasser in 1970, Iran’s relations with countries such as Egypt warmed. 
• Iran-Iraq Accord, 1975: Iran ceased support for Kurdish-Iraqi separatists, reduced hostilities and affected Israel’s strategic value to Iran.
• Post 1979: While Israel and Iran have never engaged in direct military confrontation, both have attempted to inflict damage on the other through proxies and limited strategic attacks.
• Stuxnet Cyberattack, 2010: The US and Israel are believed to have developed Stuxnet, a malicious computer virus that disrupted Iran’s Natanz nuclear facility, marking a significant moment in cyber warfare.
  • It was the “first publicly known cyberattack on industrial machinery”.
• Iran’s Proxy Support: Iran is seen as responsible for funding and supporting several militant groups in the region that are anti-Israel and anti-US, such as Hezbollah in Lebanon and Hamas in the Gaza Strip.

India’s Relations with Both Nations & Position

• Important Ally: India has very difficult choices at the moment as both Iran-Israel are important to India for its national interests. 
• India’s Position: It wants there should be “immediate de-escalation” and “step back from violence” and “return to the path of diplomacy” is, therefore, crucial to its national interest.

India’s Challenges Amid Escalating Iran-Israel War: Balancing Strategic Needs and Economic Interests

• Impact on Strategic Needs: India has invested in a strategic relationship with major Arab countries, Iran, and Israel. India has been working in this region to push for the India-Middle-East-Europe Economic corridor, which has strategic as well as economic benefits for India. 
  • An escalating Iran-Israel conflict could adversely impact the consensus that has been built.
• Impact on Economic Interests: Though imports from Russia have increased, Arab states account for two-thirds of India’s oil needs. Higher oil prices will push up inflation and delay any interest rate cuts critical to boost GDP growth. Merchandise exports, already slow, will drop further.
  • Sensex and Nifty fell due to escalating Iran-Israel conflict, making investors risk-averse.

India’s Solutions Amid Iran-Israel Conflict: Diplomacy, Engagement, Development

• A Dialogue-based Diplomatic Solution: India had always adopted this approach. India needs to engage with Israel more as Iranian actions have been initiated as a consequence of the Israeli attack on an Iranian complex in Damascus, Syria. 
• Proactive Engagement: India must proactively engage with the USA, Iran, Russia, and Israel  to ensure that this conflict is contained.
• Complete Process Fixation: India has to come up with its ‘process fixation’ in totality to promote its indigenisation drive and to counter the threat from China and Pakistan in addition to its emerging obligations in the new world order.
• Focus on Development: India has to discuss with Israel to establish defence manufacturing facilities in India which will meet the needs of India, Israel and also other friendly countries. It will provide Israel a more secure place to develop its defence industry.
  • India must fast-track the completion of the Chabahar Port in Iran which has been already delayed.

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Conclusion

India should strive to maintain a balanced approach in its interactions with various significant players in the Middle East. These include Egypt, Iran, Israel, Qatar, Turkey, Saudi Arabia, and the United Arab Emirates, each with distinct orientations and interests amidst the conflicts in the region.