Iran: India’s Pivot to Connectivity
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Issue Courtesy: CLAWS | Date : 18 Dec , 2017

India’s push to boost connectivity with Eurasia is set to be enhanced further with planned operationalisation of the International North South Transportation Corridor (INSTC) in mid January 2018. Coupled with opening up of Phase 1 of Chabahar port on 3rd December 2017, it will significantly enhance Indian strategic and economic footprints in the region, which it had been trying for nearly last two decades. Faced with constraints of a hostile geo-political narrative with respect to its relation with Iran due to Western economic sanctions; India has shown remarkable resilience and manoeuvrability to stay the course to achieve its goals, something that looked nearly unachievable in not too distant past.

Indo-Iran Relations

India’s relations with Iran have withstood the turmoil and turbulence of upheavals of the last four decades, most specifically post overthrow of regime of Reza Shah Pehelvi in 1979 and Iran’s transformation into a parliamentary democracy, mostly controlled by clergy propounding an Islamic theological ideology based on Shia Islam. As the world’s only Shi’ite government, Iran has been in a state of turbulence and deeply embroiled in conflicts with its neighbours. Its support to Hizbollah and an animosity towards Israel earned it the dubious distinction of sponsor of terrorism. Years of isolation, more specifically the economic sanctions led by USA under UN umbrella left it isolated and economically deprived due to ban on trade in spite being rich in natural resources of oil and natural gas.

The sanctions against Iran were finally removed after the Joint Comprehensive Plan of Action was signed in Lausanne, Switzerland on 14th July 2015 between Iran and the P5 plus 1 (comprising the five permanent members of UNSC, Germany and European Union) lifting nuclear sanctions in exchange for Iran’s restrictions in producing enriched uranium. Consequently the UNSC passed Resolution 2231 on 20th July 2015 suspending and eventually lifting sanctions in exchange for Iran agreeing to the Joint Comprehensive Plan, with provisions to re-impose the same in case of non performance by Iran.

Iran’s Strategic Location 

Iran occupies a strategic location and is an important link between Asia and Europe and the Central Asian Region. To the north it shares land borders with Azerbaijan, Armenia and Turkmenistan. To its east lie Afghanistan and Pakistan and to its west are Iraq and Turkey. The Persian Gulf, Straits of Hormuz and the Sea of Oman give it access to the sea and provide shipping lanes to the Arabian Sea and Middle East. Towards the north the Caspian Sea provides for direct shipping lanes to Azerbaijan, Russia, Kazakhstan and Turkmenistan.

India-Iran and Connectivity

The recent inauguration of Chabahar port located at the Straits of Hormuz on 3rd December 2017 has been on the cards for over 15 years. The work on its development could start in right earnest in 2016 after signing of the Trilateral Agreement on Establishment of International Transport and Transit Corridor between India, Iran and Afghanistan and commitment of Iran and India to jointly develop the port with financial guarantees. It further envisages a rail freight corridor up to Zahedan in South East Iran bordering Afghanistan and its eventual development into Afghanistan and onwards with potential to facilitate movement towards Uzbekistan and Tajikistan.

Similarly located to the north and on Caspian Sea is the Iranian port of Bander-e-Azali. It provides for sea connectivity to the port of Astakhan which is the southern outpost of Russia located in Volga delta, which flows into Caspian Sea. This provided for further access to Commonwealth of Independent states (CIS) and Europe through rail network.

The International North South Transport Corridor (INTSC) conceived by India, Russia and Iran in the year 2000 is aimed at establishing a multi modal transport model to provide for approximately 7200 kms of connectivity between India (Mumbai port) and St Petersberg in Russia and reduce the transit time from 45 days to 25 days. Over the years a large number of countries from Central Asia to Middle East have joined (total 14 as on date) the pact to benefit from its potential.

Connectivity beyond Iran

As things stand today, Iran has emerged as the focal point of Indian efforts to enhance its trade and connectivity with Afghanistan, Central Asia, Europe and Russia. Experts have pegged the potential of trade to US $ 170 billion in future. While Indian connectivity with Europe and Russia follows a longer sea route, it is connectivity with Central Asia that has greater potential since these countries are land-locked and devoid of direct link to India. Opening of Chabahar therefore facilitates this link. This will also significantly enhance Afghanistan’s potential to be used for transit of goods through its territory, enabling it to improve its own network of road and rail links with its neighbours.

Afghanistan, post opening of Chabahar, signed an agreement with Uzbekistan on 5th December to enhance rail connectivity between Hairatan on the Uzbek-Afghan border and Mazar-e-Sharief (built in 2011) to be extended to Herat, close to the Afghan-Iran border for eventual direct link to the sea ports in Iran. Similarly, extending the transport links to other Central Asian countries neighbouring Afghanistan to the north such as Tajikistan and Turkmenistan would be hugely beneficial for trade with India and will help Afghanistan economically as well.

Future Challenges

Having come thus far, it is in the interest of both India and Iran to benefit from enhanced connectivity and facilitate further development of the INTSC and India-Afghanistan trade since these have ramifications beyond Indo-Iran relations. While INTSC has potential to be developed as a link from Europe and Central Asia to ASEAN countries, the Indo-Afghanistan corridor has potential to facilitate trade for land-locked countries north of Afghanistan.

While India has achieved one of its major strategic objectives of facilitating connectivity with Afghanistan by bypassing Pakistan, Iran is unlikely to side with India at the cost of its relations with Pakistan and China. This was amply demonstrated during the inauguration ceremony of Chabahar port by Iranian President Hasan Rawhani where Pakistan’s Minister for ports and shipping Hasil Khan Biznenjo was also present. Similarly Iran will attempt to integrate Chabahar with China’s ‘One Belt One Road Initiative’ rather than making it a counter balance to the port of Gwadar, notwithstanding Indian concerns of Chinese Naval build-up extending up to Djibouti.

However the bigger challenge to Indian interests are the somewhat uncertain contours of the situation in the Middle East and Iran-Saudi rivalry. Coupled with a hostile and defiant anti-US policy, the Indian challenge to strike a balancing act in its relations with Iran, something it has done with great tact in the past, will test its diplomatic skills.


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