Why India Will Stand To Lose If It Doesn’t Strengthen Ties With Iran Soon

Posted by Sourajit Aiyer in GlobeScope, Politics
June 5, 2017

The world is now aware of the victory of the incumbent Rouhani over the challenger Raisi in Iran’s recent presidential elections. However, it must be brought to notice that irrespective of the identity of the victor, India will have to seek the same path for its Iran strategy – act fast and selfishly.

A year ago, India had struck a deal with Iran and Afghanistan, concerning the Chabahar project and the trade corridor to Afghanistan. This deal ensured that India gained strategic connectivity up to central Asia, bypassing Pakistan, while deepening the country’s ties with Pakistan’s western neighbours.

However, subsequent tensions between Iran and the US led to India adopting a somewhat cautious stance. In fact, the government asked firms to go slow on projects in Iran. While the objective may have been to assess the impact of possible sanctions on Iran, the widespread belief was that India did not want to upset its new friend, the US, by maintaining friendly relations with Iran.

Change: The Only Constant In Foreign Policy

Policy decisions of a country often operate in contrasting ways, when it comes to maintaining the nation’s varied interests. India’s new friend, the US, had allegedly supported Pakistan militarily during the Cold War years.

In the 1971 Indo-Pak war, it deployed an aircraft carrier of its famed Seventh Fleet in the Bay of Bengal as a show of force against India. Even today, the US has been known to sign cheques to Pakistan for the war on terror, despite allegations that Pakistan has failed to act decisively on Hafiz Saeed, Syed Salahuddin or Masood Azhar.

Russia, which had been India’s closest friend for many years, is selling arms to Pakistan today, including combat air crafts and attack helicopters. Such sales indicate a shift in Russia’s foreign policy towards Pakistan, though it lost thousands of soldiers allegedly to Pakistan-backed Mujahideen elements during the Soviet invasion of Afghanistan.

India’s relations with the US were recently rocked by the contentious H-1B visa issue, which particularly affected the technology sector – a $150 billion sector, contributing around 10% to India’s GDP. India chose not to participate in the recent Belt and Road Forum held in China on the grounds that the China-Pakistan Economic Corridor (CPEC) project runs through a part of Kashmir, thereby violating India’s sovereignty. However, India’s allies, the US and Russia, participated in the event by sending their delegations.

Given that none of these actions undermined India’s ties with the US or Russia, perhaps it is time that India acts selfishly, focusing primarily on its interests to ensure co-operation with Iran.

India Must Be A Master Of Its Own Policy

Irrespective of the disapproval of its powerful allies, India must resume its original Iran strategy. This is the opportune moment for India to develop deeper ties with Iran. Sharing intelligence with neighbours is a key requirement, even when it comes to projects which need economic co-operation. India’s argument regarding the Jadhav case – the allegation that he was abducted by the Pakistani intelligence in the border areas – only highlights the need for more rapport with Iran. India needs to build connectivity with Afghanistan and central Asia, be it for energy or trade. Therefore, its infrastructure projects in Iran are crucial in securing these relations.

If India’s allies raise concerns regarding Indo-Iran relations, it is only fair that India adopts a strong stance, asking the US and Russia to take a severe stand against Pakistan, until the US’ demands of fighting terror groups have been met. India will benefit from being selfish in this case. Otherwise, the nation will definitely become a victim of the varying policy agendas of  the US and Russia.

India Can Be The Friend That Iran Needs

During the election campaign, hardliners in Iran were very vocal about Rouhani’s inability to meet the promised level of investments and employment. Public spending on projects is expected to be an area of focus, since job creation is a socio-economic concern.

Another issue that arises here is that possible sanctions may hold back investments from private companies and restrict foreign funding. Indian firms have an opportunity to partner on public tenders in Iran. Iran needs a reliable partner for its agenda of economic development, now more than ever before – especially if Rouhani has to prove his naysayers wrong after resuming office.

Iran President Hassan Rouhani and Indian PM Narendra Modi during BRICS/SCO Summit
Can India and Iran be allies after all?

Last year, India made the first move with the Chabahar project deal. But, if India continues to dither on its Iran-strategy on the pretext of not upsetting the US, Iran will cease to view India as a reliable partner.

India, Iran And Lost Opportunities

India therefore needs to act fast. India’s laxity may lead to these projects eventually being handed over to the very powers that opposed the Rouhani regime in the first place – Myanmar being a prime example. Even China has made deep inroads into Iran for trade deals, with its One Belt One Road (OBOR) Project.

Neither India nor Iran has been known to slow their pace in order to appease their allies. However, by doing exactly that, India is only losing its opportunity. Till the US sanctions remain, foreign funding from the west will be restricted. Once the sanctions are negotiated, they will make a bee-line to the world’s newly-opened market.

Iran is an open terrain for China, given its enormous resource of funding (primarily from banks and funds). If India can structure its funding mechanism, it still has a fair chance of competing in Iran’s projects – unlike most markets that recently opened up to global investments. To this end, Iran’s foreign minister, Javad Zarif, also stressed the need for removing obstacles to ensure banking co-operation with India, during the recent foreign secretary meeting.

If India wants to be Iran’s long-term ally, while addressing geo-strategic interests, it needs to act fast and selfishly. If India fails to do so, this golden opportunity will be lost.

This post first appeared here. It has been published on YKA with the author’s permission.

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Image Source:  Sergey Guneev/Host Photo Agency/Ria Novosti via Getty Images