India, June 22 -- The US-Iran memorandum of understanding is a crisis bargain, not a reconciliation. It gives India a reprieve. The crisis has shown that the Strait of Hormuz may lie on foreign maps, but its price is paid in Indian markets.

Prime Minister Narendra Modi was right to welcome the arrangement. The US-Iran confrontation has quietened for now, the threat to Hormuz has eased, waivers on sanctions affecting Iranian oil exports are expected under the arrangement, and the nuclear question has been pushed back into the realm of diplomacy. The first signs will show up in crude prices, the rupee, fertiliser bills and freight costs. A calmer Gulf would give Indian policymakers more room to protect growth.

The Gulf is not a neat geogr...