India-Iran relations

IN NEWS:

• Iran’s Foreign Minister Dr. Hossein Amir-Abdollahian was on an official visit to India from June 8 to 10. The visit comes at a crucial juncture amid geopolitical churn not only in the region but across the globe.

HISTORY OF INDIA-IRAN RELATIONS:

• India and Iran share close historical ties from the times of Persian Empire and Indian kingdoms.
• Independent India and Iran established diplomatic links in 1950. However, Iran’s involvement in the Cold War politics separated New Delhi and Tehran in converging their relations until 1990s.
• In 2001, the two countries signed the “Tehran Declaration” which set forth the areas of possible cooperation between the two countries.
• In 2003, both countries signed “The New Delhi Declaration” which set forth the vision of strategic partnership between India and Iran.
• Since then, both countries have kept good relations, extending to areas of trade, cultural exchanges and diplomatic visits.

WHY IRAN IS IMPORTANT TO INDIA?

• Geostrategic:
  • Its proximity to the Hormuz strait gives Iran the ability to influence maritime activity along the Persian Gulf.
  • Any disruption along the Strait of Hormuz would lead to a big spurt in the prices of oil and gas, which in turn would create a major global economic crisis.

• Connectivity:
  • Given the problems with Pakistan and China’s Belt and Road Initiative, Iran provides India an alternate route of connectivity to Afghanistan, Central Asia and Europe. Iran is crucial in the success of the International North South Transit Corridor.
  • https://www.ilearncana.com/details/INSTC-project/1865
• Energy security:
  • Iran used to be a major source of oil for India before its fall out with the Trump administration. If India is able to negotiate a way around US sanctions, Iran could once again be a vital source of energy for India at a time when oil prices in India have skyrocketed
• Share a common cause in Afghanistan
  • India and Iran have faced attacks from the Taliban, Al Qaeda, Jundullah, Lashkar e Taiba and other groups, and have a common concern over the Taliban regime.
  • Eg: Iran has publicly stated that an Islamic Emirate in Afghanistan is a security threat for India and Iran and an existential threat for Pakistan, and as neighbours, India and Iran have cause to worry.
• Market:
  • India’s future growth requires the vast untapped markets of the central Eurasian landmass, particularly Central Asia and Eastern Europe >> Iran is considered to be the gateway to these markets

SPHERES OF COOPERATION:

• Economic relations:
  • Bilateral trade:
    • India was second-biggest buyer of Iranian oil after China before sanctions halted supplies in May 2019. Iran accounted for around 10% of India’s energy needs.
    • Iranian oil is a lucrative buy for refiners as the Persian Gulf nation provides 60 days of credit for purchases, terms not available from suppliers of other countries.
  • An agreement for oil payment in rupees
    • An agreement had been signed by the Indian and Iranian government for oil payment in rupees instead of US dollar. This has benefited India in saving forex reserves and strengthening Indian rupee.
  • Investment:
    • Indian government has made several strategic infrastructural investments in Iran.
    • For instance: In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabahar Special Economic Zone.
    • https://www.ilearncana.com/details/Chabahar-Port/934
  • Indo-Iran Joint Commission Meeting (JCM)
    • India and Iran hold regular bilateral talks on economic and trade issues at the Indo-Iran Joint Commission Meeting (JCM)
• Diaspora:
  • The Indian community has a strong presence in Iran, comprising of around 4000 Indian nationals.
  • Likewise, there are Iranian diaspora in Hyderabad. There is an Indian school in Tehran run under the aegis of Embassy of India.
• Diplomatic:
  • India has an Embassy in Tehran and two Consulates at Bandar Abbas and Zahedan. Similarly, Iran has its Embassy in New Delhi and two Consulates General in Mumbai and Hyderabad and two Cultural Centres in New Delhi and Mumbai.
• Cooperation over Afghan:
  • Iran and India have cooperated on connectivity projects for Afghanistan and Central Asia. Eg: India has built a 240-km road connecting Afghanistan with Iran.
• Political:
  • Iran has rarely spoken about India’s internal affairs and has been an ally in political matters.
  • For eg: the recent visit is the first by a member of the Organisation for Islamic Cooperation, which took offence to comments made in India on the Prophet. Hence, it was an opportunity for New Delhi to project the actions it has taken on the controversy and assuage the Islamic world.
  • Also, India abstained during the recent voting on the resolution by the US and its allies to censure Iran at the IAEA
• Cultural:
  • The Indian Cultural Centre was established in 2013 in Iran. It was later renamed the Swami Vivekananda Cultural Centre (SVCC) in 2018.
  • India provides various scholarships to Iranian students through initiatives such as the ITEC.
  • As India has a Shia population second only to that of Iran, religious tourism is strong between the two countries.

AREAS OF CONCERN:

• Iran-U.S tussle:
  • American-Iran tension and numerous sanctions over Iran have been a hindrance to India in promoting stronger relations. For eg:
    • India stopped importing oil from Iran in mid-2019 following sanctions on Iran by the Trump administration.
    • The US sanctions have severely curtailed India’s ability to develop the Chabahar project. As a result, in 2020, Iran decided to go ahead with its rail project, dropping India from the deal, as it was unable to participate.
    • ONGC Videsh discovered the Farzad B gas field in 2000 >> and was a part of project >> but now replaced by Iran's domestic company
• Iran’s nuclear ambitions:
  • India has never supported Iran’s mission to build a nuclear bomb. India has even voted against Iran in the International Atomic Energy Agency in 2005.
• Anti-India stance in Kashmir issue:
  • In the aftermath of abrogation of Article 370 in Jammu Kashmir in 2019, Iran’s leadership and clerics issued sharp statements, criticising India’s move.
  • Moreover, Iran had provided material support to Pakistan during both the 1965 and 1971 Wars.
• Closeness with China:
  • Iran has increased ties with China, something that worries India. Iran and China signed a 25 year 400-billion-dollar infrastructure partnership, which could affect Indian interests in Iran, the ports as well as oil and gas resources.
• Shia-Sunni dynamics:
  • Iran is Shia majority country. India houses a strong Shia population, much of which is concentrated in electorally-significant areas. This community and the even larger Sunni one make the Indian government sensitive to any Sunni-Shia tension in the Middle East that could potentially spill over into India.
• Israel and Saudi Arabia factor:
  • India has a number of key relationships in the region that will keep it from getting too close to Iran. For instance, India has close ties with Israel and Saudi Arabia, both of whom have strained relations with Iran.
• Diplomatic tussle:
  • In 2013, an Indian oil tanker was confiscated near the Strait of Hormuz by Iranian forces and taken to the port of Bandar Abbas on the pretext of the ship violating environmental norms
• Global pressure on Iran:
  • Isolation of Iran in global stage
    • US, UK and Israel have come down heavily on Iran, accusing it of carrying out the attack on an Israeli owned tanker last week, which saw a UK national killed, an issue now being taken up at the UNSC, where India is the president.
  • U.S sanction of new Iran President:
    • In November 2019, the US Treasury department put Ebrahim Raisi (now President of Iran) on its list of individual sanctions for alleged human rights violations during his tenure as Iran’s chief judge

WAY FORWARD:

• Multilateral approach:
  • India needs to continue the balancing act in West Asia that allows it to have good relations with Saudi Arabia, Iran and Israel alike. At the same time, maintaining distance from regional fractures and conflicts would allow India to pursue its economic and geo-strategic aims in the region.
• Proactive:
  • Iranian officials have cited delay in the proposed $400 million funding from India as the reason for dropping India from the rail project. Such instances should be avoided in the future. India should avoid such instances in the future. A dedicated mechanism should be established.
• Prospect alternatives:
  • India should have in place alternative plans if its relations with Iran or sanctions upon them get worse.
  • For instance, Guyana offers an alternate energy source for India, as it has large source of untapped oil reserves.

• Cooperate in Afghan:
  • India and Iran have the potential to forge a common and effective policy of engagement with Afghanistan in the future.

PRACTICE QUESTION:

Q. The rebalancing taking shape in West Asian region offers great potential to strengthen India-Iran ties. Discuss?