India and de-nuclearized Iran

By K.N. Pandita

India’s long time cordial relations with Iran came under temporary stress with the change of regime in Iran in 1979. However, as the fervour of the ouster of monarchy and induction of revolution subsided, and Iran inched towards normalcy, Indo-Iran relations began making steady come back. However, the things were not the same. In the wake of Iran-US stand off, and Teheran’s unabashed hostility towards Israel, India had to handle Washington-Tel Aviv- Teheran axis with singular caution.

Onwards of 1980s, two situations, though not mutually related, gripped the regions of Middle East and the Indian sub-continent. Its impact was inevitable. One was the nuclear programme of Iran which rattled the US and western powers, and the second was the emergence of religion-based terror in the sub-continent with its epicentre in Pakistan.

As Iran proceeded with her nuclear programme despite strong American opposition, and then imposition of economic and military sanctions by the UN on US-EU sponsored resolution, India found she was in a somewhat precarious position. Destruction of Saddam Husain and depletion of crude supplies from Iraq impinged on India’s economic growth rate. Iraq had been meeting one-third of our fuel requirements.

This was a time when India, under P.V. Narasimha Rao desired to play a role in reducing tension in the region. However, India had no real leverage in the West Asian political conundrum. Also owing to the baggage of her domestic problems heightened by low calibre strategists, she could not make any headway.

For more than two decades in the past, New Delhi went on assuring Tehran’s ecclesiastical regime that her looking towards Israel was a compulsion thrust on her by the rising crescendo of religious extremism across the border. In a sense, the rise of the teachings of the Saudi ideologue Abdul Wahhab in the Sunni world helped India in neutralising Iran’s apprehensions and even moving a step forward in wooing her to become a trade partner.

In order to contain US-Pak influence making deep inroads into the Central Asian region after the implosion of the Soviet State, India and Iran agreed in 2003 to develop Chah Bahar on the Gulf of Oman, near Iran’s border with Pakistan. India had contributed to the rail link between Chah Bahar and Sirakhs, the last post on Iran-Turkmenistan border and India’s newly discovered enter-port to Central Asia. However, this route, a possible alternative for India’s trade link with Central Asia, needed to be raised to commercialization levels.

In this enterprise as well as in the case of much-talked about Iran-Pakistan-India (IPI) gas pipeline, American sanctions on Iran remained a stumbling block. Even India’s bid to buy more crude from Iran had to be clinched at some pain owing to these sanctions. Iran was a big stick the US used to beat India with. During negotiations on India’s nuclear deal with the US, Iran even found mention in the deal’s final text.

Anyway, India did not fail to look to Indo-Iran relations beyond the prism of economic sanctions against Iran. The two countries maintained relations despite the US-led trade restrictions that halved their oil trade to 220,000 barrels per day last year.

In May last, India’s shipping Minister Nitin Gadkari and his Iranian counterpart, Abbas Ahmad Akhoundi, signed an $85 million deal for India to lease two existing berths at the port and use them as multi-purpose cargo terminals. Under the new proposal India could help build second and third terminals at the port, as well as railway connections into the rest of Iran.

From early this year, India’s stepped up its high level engagement — NSA Ajit Doval visited Tehran, followed by union minister Nitin Gadkari and then foreign secretary S Jaishankar. Around July 10 this year, PM Modi held his first meeting with Iran’s President Rouhani in Ufa, on the SCO summit’s sidelines. Foreign minister Sushma Swaraj had announced she’d be travelling to Iran.

18-month long and tortuous nuclear negotiations between the US+5 and Iran have finally culminated in the framework deal which has been endorsed by the Security Council also.

Iran has agreed to stop production of nuclear weapon. This will see the lifting of UN imposed seven sanctions on her. This development will have far reaching implications for the world and also for India in a big way. Apart from healthy impact on Indo-Iran trade and commerce relations, the deal has crucial strategic implications as well.

Iran remained handicapped in the face of sanctions which seriously conditioned her foreign policy. After the lifting of sanctions, the first strategic area in which its impact has to be monitored is the anti-Shia wave unleashed by pro-Wahhabi extremists in some parts of the Islamic world. The US with her commitment to putting an end to terrorism, and India, the home to second largest Muslim population in the world with Shia majority, are crucial to the formulation of Iran’s attitude to radicalism of the ISIS, Al Qaeda, TTP and various variants of terrorist proxies.

There is no doubt that after the sanctions are lifted, Iran is poised to become the most dominant power in the Gulf region. With the current scenario in West Asia and Afghanistan, it is very likely that strategic cooperation between Iran and the US in meeting the challenges of radicalism will assume phenomenal adjustment.

India stands to gain significantly from the emerging scenario. Iranian President Hassan Rouhani has asked India to invest in infrastructure projects worth $8 billion, including an expanded role in developing a strategic port of Chah Bahar that will open up access to Central Asia.

This port in southeast Iran is central to India’s efforts to circumvent arch-rival Pakistan and open up a route to landlocked Afghanistan where it has developed close security ties and economic interests.

According to Iranian Ambassador in New Delhi, President Rouhani suggested a larger role for India during a meeting with Prime Minister Narendra Modi on the sidelines of Ufa summit before the historic nuclear deal between Iran and world powers was concluded. The Ambassador said that with sanctions likely to be lifted soon, it was a “golden time” for India to seize investment opportunities because of the two countries’ close trade ties and shared interest in improving Central Asian transport links.

Buoyed by Iran’s historic nuclear accord with world powers to end sanctions, India will ask Tehran for rights to develop ONGC-discovered Farzad-B gas field in the Persian Gulf even as it prepares to pay USD 6.5 billion in past oil dues.

Indian firms have so far shied away from investing in Iran for the fear of being sanctioned by the US and Europe. The same was deterring New Delhi from claiming rights to invest nearly USD 7 billion in the biggest gas discovery ever made by an Indian firm abroad.
“We have been in negotiations with Iran over development of Farzad-B gas field. Now that sanctions will ease, we expect Iran to give us the developmental rights,” OVL managing director Narendra K Verma said.

Signing of nuclear deal and lifting of sanctions on Iran, is a major event in contemporary history. It is bound to impact the on-going situation in the entire Asian region; the large scale anti-Shia insanity, the Afghan entanglement, terrorist proxies and the Wahhabi permeation. It will open prospects of new alignments and strategies in which India and Iran will have a leading role. Resumption of talks on IPI gas pipeline, opening up of Iran to Indian IT investment, full commercialization of Chah Bahar-Sirakhs connectivity for entry to Afghanistan and Central Asia and Iran’s enhanced partnership in Indian Ocean maritime trade could be the contours of the new alignment..

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