Context

Recently, Iran’s Transport and Urban Development Minister Mohammed Eslami had launched the track laying programme for the 628 km long rail link between Chabahar and Zahidan which had sparked concerns that India was being excluded from the project.

Historical Background of India-Iran Relations

• The relations between India and Iran began in 1950 when they signed a Treaty of Friendship and Perpetual Peace.
• Iran became a part of the US alliance via the Baghdad pact in 1954 and the Cold War separated the budding allies.
• During the Iran–Iraq war, India remained neutral and continued economic diplomacy for oil imports.
• In 1983, they established an India–Iran Joint Commission (JC) to promote economic cooperation and organise foreign minister level meets.

Diplomatic Relations between India and Iran

Strategic Diplomacy

• India and Iran’s strategic diplomacy is based on the Tehran Declaration and the New Delhi Declaration.
• The Tehran’s Declaration included Energy Security, North-South Corridor, Defence Cooperation, Technology Exchange, Economic Trade and Strategic Dialogue.
• The New Delhi Declaration includes Energy Cooperation i.e. LNG supply, Naval training & exercises, IT Cooperation and Custom Support.

Pipeline Diplomacy

• The IPI (Iran-Pakistan-India) pipeline was conceived by a Pakistani engineer, Malik Aftab Ahmed Khan in mid-1950.
• Due to US sanctions on Iran, India since 2008 has abandoned the pipeline but in 2017, a Parliamentary panel in India has recommended that India should revive the work on the IPI pipeline.
• The panel has asserted that India can import 60 million standard cubic meters per day from South Pars gas field from Iran to Pakistan and India.

Oil Diplomacy

• In 2005, India and Iran had signed an agreement to supply 5 million tonnes of Liquefied Natural Gas (LNG) per year from 2009 and this 32-billion-dollar deal got affected due to nuclear sanctions.
• India’s ONGC Videsh Limited (OVL) in 2008 discovered gas in Farzad-B offshore field.
• It is touted as the world’s biggest natural gas field in Iran touted to have more than 500 BCM gas resources.
• In 2009, India established a consortium of Indian Oil Corporation and Oil India Limited to secure rights to develop the Farzad-B offshore field.

Port Diplomacy

• After 1991, the core objective of Indian Foreign Policy was to seek foreign support for economic development of India, engage with middle and great powers, normalize India’s engagement in the neighborhood and raise India’s profile in external neighborhood.
• The idea of Chabahar port came up in 2003 when Iranian President Khatami visited India and a deal was signed between the two states.
• The significance of the Chabahar port for India has gained higher importance after the Chinese announced the China-Pakistan Economic Corridor under the Belt and Road initiative.

Importance of Iran to India

• Strong Historical and Cultural Ties: The relationship between Iran and India spans centuries having several similar features in their culture, language and traditions.
• India’s connectivity to Afghanistan: Chabahar port on Iran’s Makran coast is well located that links India to Afghanistan and bypassing Pakistan.
• International Transport and Transit Corridor: The agreement on Establishment of International Transport and Transit Corridor between Afghanistan, Iran and India could prove to be future link of India with Central Asia and Russia.
• Isolating Pakistan across diplomatic borders: Good relations between India and Iran can help India in isolating Pakistan across its diplomatic borders.
• Iran, the largest suppliers of oil and natural gas: Iran is among the world’s largest suppliers of oil and natural gas and public transports are converting to compressed natural gas in order to provide a cleaner environment.
• Strategic Importance of Iran to India: India is involved in the construction of a 560 mile long railway linking the Iranian port with the iron ore mines of Afghanistan which is linked to a larger geopolitical and economic strategy.

Why China making deep inroads into Iran?

• Importance of Iran in China’s Belt and Road Initiative: Iran has a very crucial place in China’s Belt and Road Initiative as the US pursued the policy of ‘maximum pressure’ against Iran and left Iran under extraordinary privation and deprivation.
• Finalisation of China-Iran Agreement: The China-Iran partnership agreement has to get the final clearance from the Iranian Parliament.
• Focus on Joint Exercises and Research: China and Iran would launch joint training exercises, joint research and weapons development and intelligence sharing.
• China offering GPS to Iran: China will also offer its GPS to Iran, build infrastructure for 5G rollout and develop free trade zones.
• Immediate reprieve to Iran’s Economy: The long-term strategic partnership agreement offers an immediate reprieve to Iran’s economy that is reeling under the US’s ‘maximum pressure’ policy.

Challenges in India-Iran Relations

• Imposition of US Sanctions on Iran: India was given a waiver from U.S. sanctions to continue cooperation on Chabahar but the project has suffered delays because of the time taken by the U.S. Treasury to actually clear the import of heavy equipment
• Influence of China in Iran: Iran may well be considering a long-term partnership with China as China has greater capacity to resist US sanctions compared to India.
• Delay on part of India to implement Projects: There are numerous tales of Indian cooperation projects in Nepal, Bangladesh, Sri Lanka, Myanmar, etc. suffering delays and cost over-runs that only make it easier for China to expand its footprint in India’s neighbourhood.

Importance of India to Iran

• US Waiver to India: Iran realises the advantage of working with its only partner that enjoys a sanctions waiver from US.
• Strategic neighbour of Iran: India is a strategic neighbour of Iran as both countries are important and effective political and economic actors in South and West Asia.
• India is a steady buyer of Iran’s Oil: Since the beginning of the economic reforms in the 1990s, India, as a steady buyer of Iran’s oil, has been a reliable partner of the National Oil Company of Iran.
• India as an Emerging Superpower: India has a precise programme for development and has made great strides in achieving economic and social success in the last half century and India is viewed as an emerging superpower.

Way Forward

• Focus on improving Infrastructure Projects in Neighbours: India needs to improve its implementation record of infrastructure projects that it has taken up in its neighbourhood.
• India to remain politically engaged: The key to India-Iran ties is to continue to remain politically engaged with Iran so that there is a better appreciation of each other’s sensitivities and compulsions.
• India to de-escalate US-Iran Tensions: India should deploy the combination of soft, smart and quiet power to de-escalate the growing US-Iran Tensions.
• Focus on successful implementation of the proposed projects: Both nations need to prove their development potential through the successful implementation of the proposed projects and find ways and means around geopolitics.

Source: The Hindu