India has a strategic and economic relationship with Iran
India has growing economic ties with Iran and is investing heavily in its energy sector to provide a reliable source of fuel for India's growing economy. Strategically, while being careful not to upset its relations with the U.S. or the West, India also looks to Iran as a potential balance against Pakistan.
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India, for its part, will continue to be “tactically tough” on short-term votes by the IAEA board of governors (of which India is a member) against Iran’s continuing opacity on supplying data, albeit just enough to ensure continuing smooth strategic relations with the United States. However, it will also continue to cooperate with Iran on building oil and gas pipelines on Iranian territory to get badly needed fuels to India’s economy as well as modernizing Iranian energy transportation infrastructure, possibly even making Iran an energy transportation hub linking Central Asia, South Asia, and the Middle East through new ports and railroads. It may in fact do the latter in cooperation with Russia and China. Further, India can be expected to support Iran in niche areas of conventional defense technologies and weaponry (e.g., India recently supplied better fuel bat teries to Iran’s Russian-made submarines, as well as servicing its naval and air force equipment). It will also continue pursuing strong cultural ties that emphasize commonalities between Iran’s Shia culture and India’s own burgeoning Shiite population.26
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For Iran, India's vote could signal a long-term strategic shift in policy, where New Delhi would ally with Washington over Iran in these ongoing confrontations. This possibility could be deeply disturbing to Tehran if it was hoping that India would become a strategic partner. Needless to say, Singh has told deputies that "confrontation should be avoided at all costs." He added that, "for this to be possible, time must be given for diplomacy to work. Confrontation is not in the interest of India or of our region." In es- sence, India is taking a middle-of-the-road approach, attempting to placate both the East and West, the former for domestic reasons and the latter for international reasons. As a result, India could be the decisive bargaining chip between Iran and the United States, with both states competing for New Delhi's affirmative support. Essentially, though, if New Delhi is to remain a leader of the NAM, India cannot support any sanctions policy without appearing hypocritical. Because it is not a permanent member of the Security Council, however, it may not be forced to make a decision. The most likely option in the wake of its pending nuclear deal with the United States is to support U.S. policy tacitly while subtly maintaining relations with Iran.
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India is also helping Iran in its quest to become the transportation hub linking the Persian Gulf to Central Asia by building a transport corridor that will link India with Central Asia through Afghanistan and Iran. As part of this project, India will assist Iran in modernizing the southeastern Chahbahar port on the Strait of Hormuz, connecting it to the main roads. India also signed a memorandum of understanding more than a year ago with Iran and Turkmenistan to facilitate Indian exports to Central Asian countries by rail across Iran from the port of Bandar Abbas, which links the Persian Gulf to the Gulf of Oman. There also is an agreement among Russia, India, and Iran to construct the North-South International Transport Corridor. The creation of an East Corridor con- necting Uzbekistan, Iran, and Afghanistan is also being discussed.
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By 2010, India is poised to become the world's fourth-largest consumer of energy. As such, New Delhi has forged relations with countries that can assist it in its quest to secure adequate resources. It has even worked strategically with its age-old archenemy, Pakistan, in the international game of pipeline politics. India's relationship with Iran, however, goes beyond a proposed gas pipeline. Interestingly, Tehran yet again is the beneficiary of domestic and regional politicking. New Delhi too has both a commercial and military attraction to the clerical cadre in Tehran that has complicated India's decisions over Iran's nuclear flagrancies.For political, economic, religious, and energy reasons, political parties in India have encouraged relations with Iran. Principally, the Congress Party and Bharatiya Janata Party had sought closer ties with the theocratic Islamic republic to balance against Muslim Pakistan. Catering to the members of their domestic Muslim population who support their Iranian neighbors, the government has used this relationship to ingratiate itself with its Shi‘a constituency. India has the second-largest Shi‘a population in the world, and improving ties with Iran could send encouraging signals to the nearly 20 million Shi‘a in the country. Moreover, the Indian leftists see Iran as a vanguard challenging U.S. imperialism as members of the Non-Aligned Movement (NAM).
The Indian government welcomed news of the Iran deal. A former Indian national security advisor described the accord reached as the “best deal available.” India has a complicated relationship with Iran, and its leaders will watch closely as implementation and the consequences of the deal play out. The deal could open up economic and strategic opportunities for India and thus it’s being seen mostly with hope; however, those hopes are tempered by some challenges and uncertainties.
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Iranian trade negotiators have become more assertive with Indian counterparts as hopes rise of international sanctions on Tehran easing later this year, sources said, and Indian companies fear they may lose business as more countries bid for projects.
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The author surveys the recent history of India-Iran relations, suggesting that it may take more than the dropping of sanctions to get the bilateral relationship moving again.
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India will push ahead this week with plans to build a port in southeast Iran, two sources said, with Prime Minister Narendra Modi keen to develop trade ties with Central Asia and prepared to fend off U.S. pressure not to rush into any deals with Iran.
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India’s decision to walk out of step with the international community on Iran isn’t just a slap in the face for the U.S. – it raises questions about its ability to lead. The Indian government’s ill-advised statement last week that it will continue to purchase oil from Iran is a major setback for the U.S. attempt to isolate the Iranian government over the nuclear issue.
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