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"PM at International Conference on ‘Retrospect and Prospect’ of India-Iran relations, in Tehran" by narendramodiofficial is licensed under CC BY-SA 2.0

“Few people have been more closely related in origin throughout history than the people of India and the people of Iran.”
-Jawahar Lal Nehru, India’s first Prime Minister
On the 14th of July, the Islamic Republic of Iran dropped India from its Chabahar Rail Project (stretching from Chabahar port to Zahedan along the Afghanistan border), and gave in to a $400 billion strategic deal with China, citing delays in funding by the Government of India. This development assumes great importance with respect to the already deteriorating ties between Iran and India. This article seeks to delve into the strategic, economic and geopolitical implications that losing out on the Chabahar rail project might have on India, as well as how India can reshape its foreign policy vis-a-vis Iran in order to bypass these consequences.
India’s relationship with Iran is both a factor of history and geography. Historically, the peoples of both countries share old civilizational ties. Geographically, Iran’s location provides India easy access to Central Asia and Afghanistan without having to traverse through China or Pakistan. The Chabahar port- located in southeastern Iran is the most visible manifestation of India’s interests in capitalising on Iran’s geographical location.
First brought up in 2003 in the aftermath of the New Delhi Declaration, the agreement to develop the Chabahar port in Iran was finally materialised in 2016 when the Trilateral Agreement on Establishment of International Transport and Transit Corridor (“the Agreement”) was agreed to between Afghanistan, India and Iran. Major direct benefits of India’s participation in the Chabahar port entailed: firstly, provision of alternative and reliable access routes into Central Asia and Afghanistan for purposes of trade and commerce, where India’s earlier investment in the Zaranj-Delaram road Project (in Afghanistan) could also be utilised; secondly, a more direct sea-road access route that not only cut costs in terms of transportation and time consumed but easily would be able to skirt challenges posed by Iran’s enemies in the Persian Gulf and the Strait of Hormuz; thirdly, increased Indian presence in Central Asia would gain strategic influence for India which could pave the way towards fighting extremism, sectarianism and terrorism in the Middle East; and fourthly, competing with growing Chinese influence and presence in the region, especially since China’s overarching Belt and Road Initiative is making its way through Central Asia and Iran provides a strategic location for its expanse.
India-Iran relations span millennia, marked by shared views on regional and global development. The two countries shared borders till 1947, and since then diplomatic relations between the two countries have kept their historical ties vis-a-vis culture, language and traditions strong.
The friendship between the two countries was enhanced in 2001 when both sides signed the Tehran Declaration that set forth the areas of possible cooperation between the two countries. Then in 2003, the New Delhi Declaration was signed which set forth the vision of a strategic partnership between India and Iran. However, several circumstances ensured a complex relationship between the two countries. In the aftermath of the US war on Iraq, India strived to maintain harmony with Iran despite the latter’s evidently growing isolation due to Western sanctions. Nevertheless, India voted against Iran in the International Atomic Energy Agency in 2005, which put the New Delhi Declaration on hold. Overtime, Iran-India relations improved again, with India being Iran’s second-largest importer of crude oil. The complex relationship between the two countries is fortunately also a complementary one: Iran is the third-largest producer of energy resources, while India is one of the greatest importers of the same.
India-Iran relations, however, have continued to deteriorate since the US opted out of the Joint Comprehensive Plan of Action (JCPOA) or the Iran nuclear deal, after which Iran violated the JCPOA as well. Consequently, the US imposed a host of sanctions against Iran through the Countering America’s Adversaries Through Sanctions Act (CAATSA). Since the sanctions were primary as well as secondary in nature, they took a toll on any third-party countries that traded with Iran. India, being the second-largest importer of oil began increasing imports from other countries so as to avoid shortage in supply. Nevertheless, this did not last for long and both the countries decided that India would make payments for its imports in Rupees, which would also save outflow of its foreign exchange. In 2016, Iran, India and Afghanistan put into effect the Agreement for the development of the Chabahar port, which would strengthen economic and strategic relations between the three countries. While the Chabahar development project has been exempt from US sanctions, India’s wariness of imposition of US sanctions has meant that India has been inconsistent in performing its undertakings towards Iran and in 2019, slashed the budget for the port by more than two-thirds: from 150 crore rupees to a mere 45 crore rupees.
India has an active and interactive foreign policy for its neighbouring countries. For decades, India has given immense importance to maintaining and strengthening diplomatic ties with its eastern neighbours with the “Act East” policy that has resulted in various frameworks such as the BIMSTEC, SAARC and the ASEAN plus. However, there is no such framework on the other side to ensure the stability of relations, despite it being as important in terms of trade, investment, energy and remittances. Poor US-Iran relations, growing Chinese influence, as well as national security concerns with Pakistan have further led to weak ties with the Middle East.
Despite India’s constant efforts to maintain harmonious and peaceful relations with all countries, it has to a great extent, failed in being able to balance interests between countries. Strained relations between US-Russia or US-Iran, in this case, have meant that India is unable to balance its interests towards both parties. This adoption of the doctrine of strategic autonomy has proved quite successful in the past. However, the situation is not the same now and this remains a critical area for India to work upon in its foreign policy. Furthermore, even if India is not a participant of any regional frameworks with Central Asia, it has bilateral agreements with most countries which provide ample ambit for India to be able to work on its relations. For instance, the New Delhi Declaration, 2003, apart from setting forth goals for economic and strategic convergence also provides for cooperation in social development projects relating to education and training, preservation of common cultural heritage, and tackling fundamental problems such as disease, hunger and environmental degradation that still remain to be explored. Moreover, Indian foreign policymakers maintain that India only recognises United Nations (UN) sanctions and not unilateral country-specific ones; discontinuing import of oil from Iran, and delaying payments and implementation of agreements for fear of US sanctions definitely goes against this.
It is undebatable that Iran is an important ally and partner for India, and that the Chabahar port rail development project is a critical project that could have brought several benefits both to India and Iran, as well as Afghanistan. Chabahar also provided India with an opportunity to increase linkage and connectivity with the International North-South Transport Corridor (INSTC), that would provide further access into Russia and Europe as well. With the Gwadar port in Pakistan (controlled by China) just 72 km. away, the Chabahar port would also enable India to monitor Pakistan, given the presence of Indian engineers and military and intelligence officers at Chabahar.
Other than that, India has lost a major opportunity to connect itself with the Middle East and set an example of the advantages of being a secular democracy for Central Asia as well as the international community. India’s strong ties with Iran would not only bring economic prosperity to both countries but would also provide an effective platform to discuss and fight the rising sectarianism and terrorism that grips both countries.
The IMF has predicted that Iran’s GDP would shrink by a whopping 6% in 2020, owing to crashing public health systems and falling oil prices because of the COVID-19 pandemic. This year has been especially bad for Iran-India relations: Iran wanted India to take a stand in the international community on the death of its General Qassem Soleimani, and most recently, even asked for aid to tackle its COVID-19 crisis. India has let Iran down both times. It is imperative that India does not miss out on any other overtures (if any) made by Iran in the future if relations between the two countries have to be saved.
Lastly, India’s foreign policy has always focused on the strategic goal of expanding its power in the Asian sub-continent, which seems to be failing. With Iran announcing a 25-year strategic partnership with China as well as giving it a stake in the Chabahar port development and rail project, it becomes evident that Iran has no dearth of investors. However, what also becomes clear is that India is unable to compete with increasing Chinese influence and involvement. The Chabahar port would have served as a good alternative to China’s OBOR (One Belt One Road) initiative. It is time that India evaluates how important it is to keep the US pleased. Drifting towards the US at the cost of cutting ties with Iran only showcases losses: the gains from a partnership with a reliable strategic partner like Iran are many; the possibility of gains from a country guided by self-interest- bleak.




Jayati Gupta is a law graduate from National Law University, Lucknow.


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