PM Modi’s Iran visit has been high on strategic content and would prove important in developing India-Iran partnership in Eurasia. India will be investing USD 500 million in development of Iranian port; Chabahar which is just 72 km away from China developed Gwadar port in Pakistan. It was first visit by an Indian PM to Iran in 15 years and is a welcome effort as Chinese President Xi Xinping has already visited Iran in January this year in order to cash in first mover advantage in post-sanctions Iran economy.
A trilateral agreement was signed between India, Iran and Afghanistan which would allow India and Iran to access Central Asia and Afghanistan while land locked Afghanistan and Central Asian Republics would be able to access sea through Zaranj-Delaram-Chabahar link. Pakistan has not allowed India transit rights to access Afghanistan and Central Asian market and this trilateral agreement overcomes this issue. Sunni dominated Pakistan has close relations with another Sunni dominated country in West Asia, Saudi Arabia compared to Shia-Iran. India and Iran also supported Northern Alliance fighters along with Russia against Pakistan supported Taliban in 1990s. The route will benefit Iran too as it had been cut off from its traditional markets in Central Asia under the Soviet Union and this route will allow Iran to access this market. Iran is also important link in India’s International North South Transport Corridor (INSTC), a sea-rail-road route linking India, Iran, Russia, Central Asia and Europe. According to Road Transport and Highways Minister Nitin Gadkari, cargo by INSTC would reach Russia in about 25-30 days, compared to 45-60 days taken by the present route through Suez Canal.[1] On the other hand, Indian investment and transport corridors allow Iran to balance Chinese investments in Iranian economy. In this context, we can say that Iran is strategically important for India’s emergence as a Eurasian power.
Iran is also important for India’s energy security and since the Western sanctions have been lifted from Iran, India’s oil imports from the country could see a seven year surge in 2016-17.[2] India is also exploring a possibility of an undersea gas pipeline worth USD 4.5 billion from Iran bypassing Pakistan.[3] PM Modi and President Rouhani also expressed zero tolerance for terrorism stressing that countries that “aid, abet and directly or indirectly support terrorism should be condemned”. From Indian perspective, the statement could be aimed at Pakistan while from Iran’s perspective; it could have be directed to Saudi Arabia. The National Security Councils of the two countries would cooperate to tackle organized crime, money-laundering, narcotics trade and cybercrime.[4] The other major takeaways from PM Modi’s Iran visit include a ministerial task force to implement the development of Chabahar port, a commitment to conclude a preferential trade agreement, bilateral investment treaty and double taxation avoidance pact in a year, a new energy dialogue, and offices of trade chambers in each other’s countries.[5]
However, India needs to be mindful of the Saudi sensitivities while developing close relations with Iran, as India has been trying to considerably improve its relations with Saudi Arabia in recent times.
Endnotes
[1] INSTC to slash cargo transport time to Russia to 30 days: Nitin Gadkari, Economic Times, July 30, 2015, http://articles.economictimes.indiatimes.com/2015-07-30/news/65036755_1_indian-ocean-india-and-tajikistan-cargo
[2] India’s Iran oil imports set to surge to seven-year high in 2016/17: sources, April 4, 2016, http://www.reuters.com/article/us-india-iran-oil-imports-idUSKCN0X11ZH
[3] India, Iran discuss undersea gas pipeline bypassing Pakistan, December 7, 2015, http://www.thehindu.com/business/india-iran-discuss-undersea-gas-pipeline-bypassing-pakistan/article7958494.ece
[4] Zero tolerance on terror, share intelligence to combat organized crime: India, Iran, Indian Express, May 24, 2016, http://indianexpress.com/article/india/india-news-india/india-iran-vow-to-combat-terrorism-share-intelligence-to-fight-menace-2815278/
[5] Trade pacts, ‘energy dialogue’ on agenda, Indian Express, May 24, 2016, http://indianexpress.com/article/india/india-news-india/chabahar-port-deal-narendra-modi-ayatollah-ali-khamenei-iran-visit-2815971/