India-Iran ties are shaped around energy, Central Asia and security. These are currently being influenced by hostile relations between the US and Iran. The US has imposed sanctions against Iran in response to the Iranian nuclear program and Iranian support for Hezbollah, Hamas, and Palestine Islamic Jihad, that are considered terrorist organizations by the US. The US has recently imposed sanctions through the Countering America’s Adversaries Through Sanctions Act (CAATSA), which imposes unilateral sanctions against Iran, Russia and North Korea.
Iran’s economy is largely dependent on its oil exports; with the sanctions in place, the country is cut off from its main source of revenue. India has steadily cut imports from Iran as sanctions from the US and other Western countries blocked payment channels and crippled shipment routes. To offset the reduction in Iranian oil imports, India has turned to countries such as Saudi Arabia, Kuwait, Iraq and Azerbaijan, which have sufficient crude capacity to replace Iranian crude oil imports.
Iran is a geopolitical entity in its own right. Iran has borders with a large number of countries that India could not access because of the barrier that Pakistan posed to India’s overland connectivity plans. India’s relationship with Iran has been built carefully and thoughtfully by all past governments as Iran for India is not just an energy supplier from the Persian Gulf regions. Infrastructure building activities in Afghanistan are done with support from Iran. India is worried about the situation in Afghanistan because of the larger national security concern attached to the region : Possibility of dominance by Taliban, Rise of extremist threats to India, Pakistani influence and Strategic encirclement by China. Afghanistan is particularly important for both India and China as there is a possibility of a power vacuum in the country after the US’ withdrawal. So, Iran is vital for India to secure its interest in Afghanistan and Central Asia as it can connect India to these regions.
Iran’s Chabahar port is vital for India’s geopolitical and economic interests in West Asia, Afghanistan and Central Asia, which is a part of India’s extended neighbourhood.The trade and transit corridor allows India to access these regions over land by bypassing Pakistan.The significance of this port has risen in recent years because of China’s bid to increase its influence in India’s immediate and extended neighbourhood via BRI and ‘cheque book’ diplomacy and investments in ports like Gwadar.Chabahar’s location as a gateway to the Indian Ocean makes it ideal and lucrative regional shipping hub.It offers India a geopolitical vantage point from which it can keep an eye on Pakistan’s Gwadar port. Located barely 90 km away, Gwadar port is being developed by China as the pivot of its investment in Pakistan and a key juncture in its ambitious BRI. Iran recently announced that it would initiate work on a crucial rail link between Zahedan and Chabahar Port alone. India had earlier committed to jointly develop the rail track in 2016. Iran justified this move by stating funding delays from India.India’s External Affairs Ministry clarified that it had been left to Tehran to nominate an authorised entity to finalise outstanding issues – technical and financial – after the meeting between two sides in December 2019 to review the railway project.India being kicked out of this important project may be due to India’s close ties with the US and China’s growing influence in Iran, which is facing increasing economic crisis because of sanctions.
India’s relations with Iran are often under duress due to US pressure and sanctions that are blocking legitimate financial highways to and from Iran.India is facing difficulties in balancing its relations with Iran and US as most suppliers for projects in the sanction-hit country fear their names featuring in US blacklists.It is also forced to take sides with the US despite numerous issues because it is facing an almost-war like the situation with China in Ladakh.The US is motivated primarily to protect its own interests in India and India’s neighbourhood, with little to benefit for India.Yet, India seems to be reluctant to improve its ties with Iran after the US’ withdrawal from the nuclear deal. This convinced Iran that India would not collaborate to its needs to counter the US sanctions.This makes an alliance with China more advantageous, though Beijing would not endanger its already tense relations with the US.
Iran knows the risk of close ties with China and is wary about it. However, it has a limited choice as US’ aggressive foreign policies has isolated it from the world and crippled its economy. Iran is against India’s decision to abrogate Article 370 and 35A.It has called on India and Pakistan to show restraint and prevent the killing of innocent Kashmiris, revealing possible close ties between Pakistan and Iran.Iran also voiced against extremist Hindus and their parties during the 2020 Delhi riots.Apart from these issues, Iran also sidelined India’s ONGC from exploration rights at its Farzad B Gas field, stating that it will engage the company at a later date.
As India is treading a fine line in balancing relations with the US, China and Iran while striving to augment its political influence in West Asia, embracing one country over the other is not an option for India.Therefore, a multilateral foreign policy is a way forward.India must retain its involvement in the Chabahar port development because of the geostrategic significance. In the immediate term, India should improve its multi-alignment credentials to absorb investments into the port projects from the public and private sector, boost maritime cooperation among littoral countries to enhance the transit of goods, and foster regional partnership for the Chabahar port development.Based on the mutual geostrategic and energy interests, India could collaborate with Japan under the Asia-Africa Growth Corridor.Japan’s participation would enhance the multilateral characteristics of the transit hub in the region, unlike the China-owned Gwadar port. This will further enhance multilateral investments to solidify regional economic partnerships that enable the sustainability of the port. In conclusion, India-Iran relations are economically and geostrategically important for New Delhi. A new multilateral foreign policy strategy is vital for India to maintain strategic autonomy that favours inclusive growth and national interests.
Sources: The Hindu, The Indian Express , The diplomat and IAS express.








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