While Narendra Modi’s visit to the United States, his fourth in two years, will draw a lot of media attention, his two day visit to Iran starting May 22, his first since taking over as prime minister, is no less significant. It is relevant both in economic and strategic terms, since Iran is India’s gateway to Afghanistan and Central Asia and an important bulwark of India’s Act West Policy.
India’s oil needs are increasing and in the pre-sanctions era India was the second largest importer of oil from Iran and still owes it $ 6.5 billion to Iran for crude oil imported during the period of sanctions.The Chabahar port in southeastern Iran was partially built by India in the 1990s, with the geo-political objective of gaining access to Afghanistan and Central Asia. This port would help in bypassing Pakistan and is dubbed many as India's response to the China-Pakistan Economic Corridor with Gwadar Port in Pakistan's Balochistan province.
It is because of these strategic reasons that many analysts feel Modi should have actually visited Iran before he went to Saudi Arabia in April.
Rebalancing the relationship
But the spadework for Modi's visit has been ongoing. Both Minister of State for Petroleum and Natural Gas, Dharmendra Pradhanand Foreign Affairs Minister Sushma Swaraj visited Iran in April.
Pradhan's visit included discussions about the interest of Indian petrochemical and fertiliser in investing upto $ 20 billion in the Chabahar special economic zone. Participation of Oil and Natural Gas Corporation in Iran's Farzad-B gas field, which the consortium led by it had discovered in 2008 but could not go ahead with due to sanctions, also figured in the talks.
Swaraj's visit and meeting with President of Iran Dr Hassan Rouhani focussed on the Chabahar port and the important Chabahar-Zahedan-Mashhad railway project. The trilateral agreement involving India, Iran and Afghanistan on Trade and Transit Corridor through the Chabahar port was also discussed, while the Iranian President called for greater cooperation between both countries in the fight against terrorism and on the issue of Afghanistan.
It is expected that Modi's visit will build on these discussions and take them to their logical conclusion. As the ministry of external affairs put it:
"The visit of Prime Minister to Iran will seek to build on these commonalities by focussing on specific cooperation in regional connectivity and infrastructure, developing energy partnership, boosting bilateral trade, facilitating people-to-people interaction in various spheres and promoting peace and stability in the region.”
Despite the long history of India-Iran ties that have consolidated in recent years in both the strategic and economic spheres, a few points need to be kept in mind.
First, a number of other great powers including China are aggressively wooing Iran. Beijing had in fact being eyeing the Chabahar project, and had evinced interest in an Industrial City in the port, one of the reasons why the Modi government has shown some interest in the project now. In January 2016, Xi Jinping became the first Chinese President to visit Iran in over a decade. Both sides have sought to enhance bilateral trade to $ 600 billion in the next 10 years and work jointly to revive the ancient Silk Route between China and Iran. The Chinese have dubbed their vision of the project as "One Belt One Road" and continued economic ties with Iran even during the period of economic sanctions.
While Russia and other western powers too have been courting Iran, India needs to keep a closer watch on China’s engagement with Iran, and move faster on projects like Chabahar and Farzand-B. One way could be to work jointly with friendly countries. Japan has already evinced interest in developing an Industrial Complex in Chabahar and there has been some talk recently of India working jointly with it.
Second, India will have to watch out for Pakistan as it is bound to make serious attempts to destabilise the India-Iran relationship, given that its own geo-political relevance will reduce once Chabahar facilitates direct access for India to Afghanistan. Iran backed the Indian stand when the spy thriller from Balochistan was sought to be brought in, but the need for caution could not be over-emphasised.
Third, Iran and Gulf Cooperation Council countries have witnessed a new low after the recent Organisation of Islamic Cooperation Conference, where a communique condemning Iran for supporting terrorism was issued at the behest of Saudi Arabia:
The [OIC] conference deplored Iran’s interference in the internal affairs of the states of the region and other member states, including Bahrain, Yemen, Syria and Somalia, and its continued support for terrorism.
India’s ties with Saudi Arabia and United Arab Emirates are witnessing an upswing even in the strategic sphere and it will need to deftly balance these with its relationship with Iran.
Fourth, President Obama’s approach towards Iran gave India some space for manoeuvre and it remains to be seen whether his successor will show similar pragmatism. A more aggressive policy towards Tehran by the USA would not be good news for India.
In conclusion, the India-Iran relationship needs to be handled with subtlety and not sound bytes. There is immense promise in the relationship, but the challenges should not be underestimated.
Tridivesh Singh Maini is a New Delhi based analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat, India.