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The Changing Dimensions of the India-Iran Relationship

by Munshi Zubaer Haque

India and Iran share ancient civilizational ties that have existed for more than a millennium, the relationship stretches from the times of the Achaemenid Empire till the present and has gradually developed into a defining strategic partnership for Indian foreign policy. Diplomatic relations between India and Iran were established in 1950 and the ties have stood the test of time since. However, India’s relationship with post-revolutionary Iranian regime saw a transformation towards a strategic alliance, with the end of Cold War. At the turn of the century, in 2001, New Delhi and Tehran signed the Tehran Declaration in which both the signatories committed to strengthening their bilateral cooperation in the fields of political, strategic, economic, technological and cultural fields for mutual benefits and for enhancing regional peace and stability. This was followed by the New Delhi Declaration in 2003. President Rouhani’s first presidential visit to India during his term last month underscores the broad importance of this bilateral relationship. He was on a follow up visit to the visit made by the Indian Prime Minister Modi to Iran in 2016. Interestingly, this visit follows closely on the heels of India’s increasing multidimensional bilateral engagement with Iran’s archrival, Israel. India has already distinguished itself as the largest importer of Israeli military products. Amid growing chances of direct military confrontation between Israel and Iran, recent political and security developments in West Asia hints at the highly volatile situation in Lebanon and Syria. So, India’s continuing engagement with various regional actors amidst its growing geostrategic footprint in the region has broadly reflected its neutral position in conflict torn Middle Eastern politics.

President Rouhani’s visit to India witnessed the signing of several MoUs, the most important of which was Iran’s successfully awarding of ‘Lease Agreement’ of Shahid Behesti port at Chabahar to India. This is an important geostrategic posturing for India, as operational control of Chabahar in Indian hands would allow India to bypass connectivity through Pakistan and expend its connectivity to markets in Afghanistan, Central Asia and beyond. India has previously approved a $150 million Line of Credit to equip and operate two berths at Shahid Behesti Port at Chabahar but the line of credit has not been released yet. India will reportedly invest a total of $2 billion for rail and road projects in Iran, out of which as much as $87 Million will be allocated for developing the Chabahar port. India’s engagement with Iran is also vital for its Eurasia policy, as both nations are signatories to the ambitious multinational International North South Corridor Project (INSTC), a 4500 miles long multimodal network for freight transportation between India and Russia. At its present stage, the International North South Corridor Project (INSTC) is operational by both road and rail networks from Bandar Abbas in the Persian Gulf to the Caspian Sea shore in northern Iran, from where it is linked by ship to Azerbaijan, Armenia and Russia. India-Iran energy cooperation also received a new impetus with visit of President Rouhani, as reportedly, Indian oil companies are reportedly set to raise their oil purchases from Iran. As Iran continues to face prospects of new draconian economic sanctions under the Trump Administration, it has reportedly agreed to offer 100% discounts on oil freight transportation for India.

India also played an important role in maintaining trade relations with Iran despite tough economic sanctions that Iran faced over the years since 2012 and till economic sanctions were lifted in 2016 after an agreement with P5+1. After sanctions were lifted in 2016, Iran reportedly rolled back discounts. India responded back by reducing oil imports from Iran, the matter now seems to have been amicably resolved with Iranian assurances to India regarding development of the offshore Farzad B gas field. Iran is the third largest supplier of crude oil to India after Saudi Arabia and Iraq.

India-Iran relations clearly indicate that in an increasing multi-polar world, India’s foreign policy establishment is leveraging regional ties for maximum gains rather than seeking alliance with great powers, it can be rebranded as a form of realist strategic independence. As an impending American retreat from the Middle East raises the alarm about a direct confrontation between Israel and Iran, India seems to have clearly ‘De-Hyphenated’ its ties with Iran, Arab powers and with Israel. As seen during the past Lebanese civil war and also during the ongoing Syrian Conflict, India has been able to maintain a neutral role. So it is highly unlikely that changing geostrategic contours in Middle East will prompt any radical shift in ties between India and Iran.

Munshi Zubaer Haque is an Intern at the Beirut Center for Middle East Studies

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