Indian Defence Review

China’s ambitious One Belt One Road (OBOR) project, of building rail, road and pipelines across the ancient Silk Route is seen as a game changer in the geopolitics of 21st Century.  Pumping of 46 billion dollars in the Investment of building the China-Pakistan Economic Corridor (CPEC) is perceived as a challenge and threat in India’s foreign policy perils, which can hamper India’s regional hegemony in South Asia. Naturally, the idea of CPEC is not taken pleasantly in India as the CPEC spans across 200 Kms of Kashmir. Therefore, to counter the CPEC, India has come up with its own pointer of geostrategic interest, Chabahar Port in the southern region of Iran barely 74 kilometers from Gwadar, which is the end point of CPEC. Through Chabahar India gets access to markets in Iran, Afghanistan, and the landlocked countries of Central Asia which are treasure-house of oil and gas surplus.

On May 7, 2016 PM Modi signed a MOU with Iran to develop the Chabahar^[i], which was supposed to have taken place much prior in 2003 but was in dust as there were too many western sanctions against Iran due to its controversial nuclear program. A separate trilateral deal was signed between India, Afghanistan and Iran, which was about the establishment of a land transit-and-trade corridor. The project is expected to increase trade, economic and cultural engagement between the three countries. This trilateral agreement will be seen as a breakdown to the geographical blockades caused by Pakistan on India, Afghanistan and other central Asian countries.

Across the border in Afghanistan, India has built the Zaranj-Delaram highway that connects with a ring road linking Kandahar, Kabul and Herat. On the Iranian side, India could access the (INSTC) International North South Trade Corridor to reach its goods to Europe. The Chabahar route is about 40 per cent shorter and 30% cheaper than its present sea route of Red Sea-Suez Canal-Mediterranean^[ii].

Implications of Chabahar Port in India-Iran Relations

The nature of India-Iran relations is rather complex. On the one hand, they have been warm and cordial to sustain a very deep energy relationship, with India importing a fair amount of Iranian hydrocarbons^[iii], although New Delhi has been cited numerous times about not been able to deal with Iranian energy due to the sanctions on Iran which is also owing to India’s strengthening relations with the United States. It is predicted that the tension points between Iran and India will be dimmed if the relations of US-Iran reaches a final consensus on the nuclear deal^[iv], which have been on a positive note ever since the signing of Joint Plan of Action between the P5+1 and Iran adopted in Geneva in November 2013^[v].

Also, the Chabahar deal is of great significance for bilateral relations as it sends across a message to the Iranian community that India is committed to supporting a major infrastructure project in Iran, emphasizing the fact that India looks at Iran as a partner, and not just an option. In the current scenario, India values its relations with Iran, understands the significance that Tehran can bring to New Delhi but the current Modi-led government seems quite keen on not provoking the United States.

Iran – China relations: Cause of Anxiety

The relationship between Iran and China is not officially defined. Approximately 80% of China’s total imports from Iran are oil and the rest is mineral and chemical products. China is now investing in the modernization of Iran’s oil and gas sector. The China National Petroleum Corporation (CNPC) was granted an $85 million contract to drill 19 wells in the natural gas fields in Southern Iran and signed another similar 6-billion-dollar contract ^[vi].

Iran in China is seen as an important state in the role of China’s OBOR initiative, and is an important source of supply of oil and other energy resources that are needed in the constructions in OBOR projects. While for Iran, China plays the role of a senior mentor in Iran’s military capabilities, particularly as China sells arms and transfers nuclear technology to Iran[vii]. In fact, it was China’s (and Russia’s too) benevolence that the West has finally considered it to lift sanctions on Iran.

Another cause of serious concern for India is that Iran and China connect with each other on a deeper level about how both these countries view the United States^[viii].

Washington Scorned 

The US categorically opposes any developments which involves investment or money transactions with Iran. There were talks in India whether an investment of this caliber would provoke the US with whom India shares a deep relationship especially in matters of security. The US has not opposed this project, but its silence conveys a lack of support. Probably this project may not have any effect on US-Indian ties, because New Delhi will probably wait and see if sanctions are lifted on Iran before they move toward a final agreement on Chabahar. If there is a US-Iran deal, then India will likely move forward on the project. In fact, it will be in the US’s favour to support this project, as Chabahar will bring economic stability to Afghanistan and contribute to regional cooperation in South/Central Asia – the very aims that the Washington has frequently articulated for this part of the world.

Conclusion

The best thing India can do is calculate the pros and cons, and bargain with great acuity with Iran on a competitive basis, as Iran might accord less preference to India before its other stakeholders in Iran’s trade, which could be China, Russia, Turkey or the countries in the European union.

Closer ties with Iran should not be at the cost of weakening ties with Israel. Israel has always been a close strategic partner of India with whom Iran shares a bitter relationship. As Israel and several West Asian states are at hostile towards Iran, India must sensitively use its diplomacy to balance its equations. This deal has multi-dimensional consequences for India- economic, geostrategic and even cultural. India should capitalize on the prospects that this deal offers, while at the same time exercise caution in moving forward in that it wait till Washington removes some sanctions on Iran.

Chabahar is definitely a win-win situation for India, Iran and Afghanisthan; yet there lingers an anxiety of western sanction on Iran which can cost India crashing billions of dollars on Investment.

Courtesy: http://www.claws.in/1693/post-sanctions-iran-deal-or-a-deal-breaker-for-india-neha-surwade.html