Modi's Visit to Iran

The recently concluded Modi’s two day standalone, bilateral visit to Iran after lifting of international sanctions resulted in signing of 12 major agreements. Subsumed by hesitation India till now failed to elevate its traditional and historic relations with Iran to a new level. India and Iran were neighbors till 1947 and established diplomatic links in 1950. India set up embassy in Tehran and two consulates in Bandar Abbas and Zahedan. Indo-Iranian relations so far relied on the breather of oil imports and religious connect of Indian Shia Muslims. After the collapse of Soviet Union, augured by its deep urge to engage with US India partly averred to build strong relationship with Iran. Further, the perception of Indian levitation towards Iraq owing to large massive outflow of Indian labor and New Delhi’s steady and strong relationships with Israel too dampened the potential of the bilateral relationships. Moreover India’s refusal to stand by Iran (but instead preferred to remain neutral) during the sanctions and its voting record against Iran in International Atomic Energy Agency (IAEA) remained as hassles to potentially transform the relations. By and large despite common strategic interests, divergent foreign policy issues stymied relations.

NDA-1 led by Atal Bihari Vajpayee took baby steps to sculpt a new era of friendship by signing the first agreement on Chabahar port. But India’s lack of persistence and international sanctions on Iran caused gradual erosion of strategically important project. In the meanwhile, following the imposition of international sanctions by the US and UN, Iran reeled under the economic crisis. Though India continued to import oil from Iran albeit in smaller amounts due to complicated payment procedure, bilateral relations thrived on trade transactions. On July 14^th 2015 Joint Comprehensive Plan of Action (JCPOA) between Iran and P5+1 (US, Russia, UK, France, China and Germany) was implemented whereby international sanctions were lifted in return for external control of Iran’s nuclear program. This marked a beginning of a new phase as $100 billion worth Iranian assets are de-freezed. A flood of opportunities started knocking Tehran’s door with Europeans evincing great enthusiasm to invest in Iran. Anticipating Iran’s entry into global oil markets, Oil prices have hit a new low. With international sanctions gone, India and China, the largest importers of crude oil seriously contemplated on rejuvenating energy ties with Iran. Iran is now fifth largest crude oil supplier for India. Earlier in 2002, as Iran supplied crude to India and Pakistan, nations mulled on developing the $7.5billion, 2700 km long India-Pakistan- Iran (IPI) but due to Pakistan’s obstinacy, the project is now shelved.

Post- sanctions, India has consistently increased its oil imports from Iran and from April India is importing to 400,000 barrels of crude per day. Besides oil, India is keen on sealing the development, financial and commercial terms to develop Farzad B block in the Farsi gas fields. Just days before Modi’s visit to Tehran, Indian companies has cleared long pending oil bills worth $6.5 billion to Iran setting a platform for deepening energy ties.

Modi met President Rouhani earlier along the sidelines of the Shanghai Cooperation Organisation (SCO) at Ufa. On his maiden trip to Iran, Modi held talks with Iranian Supreme leader Ayatollah Khameini, met other senior officials and visited Tehran’s only Gurudwara founded by Bhai Ganga Singh Sabha.

Among the various aspects like energy ties, defence cooperation, economic investment that dominated the agenda the issue of connectivity was accorded paramount importance. In 2003, Vajpayee mooted the tripartite agreement for “preferential trade” with Iran and Afghanistan with the trade eventually moving through Chabahar port of Iran. India’s connectivity to Central Asian countries and Afghanistan was constrained by geographical barrier. The movement of goods and transit to these regions was hampered as Pakistan vehemently opposed land access and denied passage of goods. To bypass Pakistan, India conceived the idea of developing Chabahar port. Strategically located in the Northern coast of Gulf of Oman, Chabahar unlike the sprawling port of Bandar Abbas is underdeveloped and closest to India. It also the only port in Iran that has direct access to Indian Ocean. Further, it is just 76 nautical miles away from the Gwadar port of Pakistan being developed by China as a part of the $46 billion China Pakistan Economic Corridor (CPEC). Needless to say, Chahbahar port will be ideal to keep track of Chinese movements even. Notwithstanding international pressure India shipped 1,00,000 metric tons of Wheat to Afghanistan as a humanitarian aid in 2012. India partially built the port in 1990s.

While Chabahar, is undeniably strategically important progress was tardy. It was believed that Iran was unenthusiastic initially as Chabahar falls in Balouch majority, Baluchistan-Sistan province. The Army of Guardians of the Islamic Revolution (Revolutionary Guards) operate from the port and reportedly send arms to Yemen. In 2009 India granted $135 billion towards construction of Zaranj-Delaram highway in Afghanistan linking Kabul, Herat, Mazar-e-Sharif and Kandahar. In 2012, when Prime Minister Man Mohan Singh visited Tehran to attend the Non-Aligned Conference, a trilateral joint working group was constituted when Iran finally conceded (reeling under international sanctions). By 2013, $100 million was released for port development. The agreement began to gain some momentum when Sushma Swaraj on his visit to Tehran on April 11^th 2016, (soon after Modi’s visit to Saudi Arabia), finalized the draft of the Transport and transit corridors (Chabahar) at the second technical meeting of experts from India, Afghanistan and Iran. Modi’s current visit to Iran has been truly historic for he signed the milestone trilateral transport and transit corridor agreement along with his counterparts President Rouhani and President Asharf Ghani.  It is truly iconic as for the first time India will be developing a foreign port. Modi promised early implementation of the project and pledged $500 million towards its development. India will develop two terminals and five berths (two container berths & three cargo berths). The agreement is considered as “game changer” as India can now connect to its extended neighborhood and Europe bypassing an intractable neighbor. Chabahar port can open new trading vistas to South Asia. Chabahar port can be linked to the existing International North-South Trade Corridor (INSTC) that passes through Iran and connects to Europe and Central Asian Countries. This route is shorter and cheaper than the regular Red Sea-Suez Canal- Mediterranean. Chabahar- Zahedan rail line will help India connect to Iran’s rail network also. India signed a trilateral agreement with Iran and Afghanistan to help in building the Chabahar-Zahedan rail line.

Apart from rejuvenating connectivity networks, other major agreements signed include- a joint venture between India’s National Aluminum Company Limited (NALCO) and the Iranian Mines and Mining Industries Development and Renovation Organisation (IMIDRO) to manufacture aluminum metal. Other important MoU include- Cultural Exchange Program (CEP), interaction between think-tanks of MEA of both countries, cooperation in fields of science and technology etc. India also promised Iran to support its accession to World Trade organization.

Much to Pakistan’s discomfiture the trilateral agreement would gradually reduce its stranglehold over Afghanistan’s trade and can strengthen India’s relations with Iran, home for Shia Muslims. India, has highest number of Shia Muslims after Iran and has strong religious connect with it. China and Pakistan through CPEC effectively isolated India. With Chabahar agreement India trumped the containment of India policy. India can now refurbish economic ties with the Central Asian countries dominated by China and Russia so far. Moreover, this agreement can bring economic development to the strife-torn Afghanistan. Through joint action India and Iran can fight the scourge of terrorism and restore normalcy and stability to the region. While India has every reason to cheer about, on a lighter note, it is believed that Pakistan has intensified aggression along the LoC following India’s success.

Post- international sanctions, Iran has emerged as favored economic destination. Indian companies are already in talks with Iranian counterparts to set up fertilizer plants, petrochemicals industries and metallurgy units. Unlike other nations in the Middle East, economic ties with Iran can be a best bet since its population is young and dynamic. Youth are educated. This aspirations of the middle class are reflected in recent elections where they voted out hardline Islamic leaders and favored Rouhani’s moderate stance of propelling the economy.

Modi’s visit to Iran is believed to be long overdue. President Xi visited Iran weeks after official lifting of international sanctions and overhauled the Sino-Iranian relations. He explored the possibilities of investing in the infrastructure development and energy sector. Iran has  agreed to be a party to One Belt, One Road (OBOR) and already the first freight train from China’s Zhejiang Province passing through Kazakhastan and Turkmenistan has arrived in Tehran. China in past has been a major supplier of arms to Iran and with lifting of sanctions Russia and China are contemplating on selling advanced weapons like J-10 fighters and high speed missile boats sold to Pakistan. While Chabahar project is a milestone agreement through which India can increase its geostrategic presence in the region, China’s Silk route and OBOR has become omniscient in South Asia. China attaches great importance to Middle East for its larger economic gains. But India, has traditional links with the region and with 7.5 million strong Diaspora working there, it enjoys greater level of cultural connect.

With the conclusion of the trilateral transit agreement, the proposed $4.5 billion India Iran Oman gas pipeline might be eventually sealed. Interestingly, while Modi signed the agreement in Iran, Defence Minister Manohar Parrikar is in Oman to strengthen ties. This 1400 km undersea pipeline will circumvent Pakistan’s exclusive economic zone and pass via Oman Sea. Construction of pipeline will start from Chabahar and extend to Gujarat Coast. Ayatollah Khamenei welcomed Modi’s efforts towards strengthening bilateral ties. Both sides condemned burgeoning regional terrorism and condemned the proliferation of terror networks across various countries and sought cooperation in counter terrorism activities. Modi and Rouhani has equivocally supported a strong, resilient, economically stable and independent Afghanistan. India has inked pacts for defence and counter-terrorism cooperation

Before concluding his trip, Modi invoked the traditional cultural connect between the nations and inaugurated the conference- India and Iran, Two Great Civilizations: Retrospects and Prospects. Modi recalled centuries old associations between the civilizations and released a rare Persian manuscript Kalieleh-Wa-Dimneh that reiterates the historical linkages between India and Iran. The spectacular success of Modi’s trip to Iran is an ode to his diplomatic acumen for spearheaded India’s bid to forge a geo-strategic alliance. Modi engaged with UAE and Saudi Arabia earlier and deftly stayed away from the broiling Middle East geopolitics. Clearly, Modi till now has focused on strengthening trade links with economically robust nations and smartly engaged with rival nations (both Iran and Saudi Arabia). Above all, Modi’s Iran visit will be highly treasured for its tangible outcomes that reposes incredible onus on India’s deliverance competencies.




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