The next chapter in the Countering America’s Adversaries Through Sanctions Act (CAATSA) saga will unfold on November 5, 2018. On this day, the provisions reimposing sanctions on entities trading with Iran in certain sectors will come into effect.
In India, the primary discussion point has been whether India will receive a significant reduction exemption on November 5. Such an exemption will allow Indian companies to continue importing Iranian oil without coming under ‘menu-based’ sanctions. It is quite likely that India might receive an exemption for both oil imports and for development of the Chabahar port. However that is not the only point of contention for India and the region.
Regardless of the decision on November 5, CAATSA is already closing the door on new solutions for the war in Afghanistan.
First, it increases the costs for Iran and India to collaborate on Afghanistan. We had written last year that not only will the Chabahar port help Afghanistan, the US will have much to gain from a connectivity project for Central Asia which does not have China at its core. But with the threat of secondary sanctions looming, companies at the margin will not invest in any project that involves Iran — why assume the risk of a volatile geopolitical environment which comes at a prospective cost of making business in the US market difficult?
Second, it also closes the door on a Russia – US understanding in Afghanistan. What we often forget is that ouster of the Taliban after 9/11 was made easier by an alignment of interests between US and Russia albeit for a brief period of time. Russia at that time provided critical logistical support from Afghanistan’s north and shared crucial intelligence for US-led coalition forces. CAATSA makes any such arrangement in the future even more unlikely.
Combine these two effects with the fact that the US attempt at talks with the Taliban are making no headways, and what you get is that there are zero new possibilities to end the war in Afghanistan. Only two scenarios remain. One involves the US withdrawing out of Afghanistan completely. The second involves the US returning to its dependence on Pakistan. Both scenarios will leave Afghanistan worse-off.