Context
India’s relation with Tehran needs remodeling, considering the recent drop in trade and economic ties.
India-Iran Bilateral Ties
Mutual Benefit
- India and Iran both requires stabilized Afghanistan, since the return of Taliban in Kabul would affect crucial interests of both the nations.
- Iran is the only country without the US dominance which stands between India and the West, which has massive reserves of both oil and gas.
- India ignored the Iran–Pakistan–India (IPI) gas pipeline project from the overall unfriendly relationship with Pakistan. Gas exports to Pakistan and India would give Iran valuable long-term customers.
- India does not want to see another nuclear weapons state in Persian Gulf that would instigate countries such as Saudi Arabia, Egypt and Turkey to also acquire nuclear weapons. India has not been assisting Iran’s nuclear programme except as permitted by the IAEA.
- India could also be a source of important defense equipment and technologies for Iran. India’s hesitation may be related to the sensitivities of Israel, a nation that has sturdy ties with India.
- India’s relations with Iran are integral and the reformist regime of Hassan Rouhani is looking for a wider global involvement.
Kashmir Issue
- Iran’s Supreme Leader Ayatollah Ali Khamenei ended up equating the Kashmir conflict with those in Yemen and Bahrain
- In 2010, Ayatollah emphasized the need to safeguard the unity of Muslims from all over the world and sympathized towards the people of Afghanistan, Pakistan, Iraq and Kashmir
Qatar Catastrophe
- The Ayatollah’s expressed concern about getting regionally isolated primarily due to Donald Trump administration’s hard line against Tehran that prompted Saudi Arabia and its allies to squeeze Iran out of the regional matrix.
- The de facto blockade of Qatar by Saudi Arabia, Egypt, Bahrain and the United Arab Emirates (UAE) after isolating diplomatic ties last month highlights this reality.
- Saudi Arabia and Iran are engaged in a range of proxy wars across the region in Bahrain, Syria, Yemen, apart from their growing hostility in Iraq.
- Since the inception of the Iranian revolution, Riyadh and Tehran have struggled to lead together with their own respective interests.
- An attack on Iran’s Parliament on June 7, for which it blames Saudi Arabia, has further heightened the tensions.
India’s approach
- The emergence of the Kashmir issue in India-Iran bilateral dialogue is not new. The fact that India has always been wary of Iran’s support for Pakistan in the Organization of Islamic Cooperation (OIC) regarding Kashmir, is well known
- Iranian criticism of India’s position on Kashmir has repeatedly sparked protests within the Indian government against Iranian interference.
- The Ayatollah’s recent utterance on Kashmir might be a signal to India that its growing closeness to Saudi Arabia and the UAE is being watched closely in Tehran.
Impact on Economic ties
- The recent decline in economic ties is of great concern to both countries, especially India.
- Iran seems to be sluggish in deciding to award the contract for gas exploration in its Farzad B offshore field to ONGC Videsh. This has triggered to a further decrease in volume of Iranian crude oil to India.
- On the contrary, there are reports of Tehran – Russia initial agreement for the contract.
- The unhurried pace of the Chabahar port project has further displeased Iran. Tehran has invited Pakistan and China to get involved in the project. From India’s perspective, this dents the very strategic utility of the port that was seen as the India’s answer to the Gwadar project (by China and Pakistan)
Way Ahead
- A lot remains to be done to ensure the sustenance of economic ties and repair with the Rouhani government as soon as possible.
- There are far too many issues, including the future of Afghanistan, that require closer coordination between the two countries
- While New Delhi has done well to ignore the Ayatollah’s provocation on Kashmir, it needs to effectively architect a well balanced policy to mend economical ties with Tehran.
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