It's in India's interest if Modi strengthens ties with Iran

After his successful visits to the UAE and Saudi Arabia, Prime Minister Narendra Modi is finally turning his attention to Iran, widely regarded as the decisive power in an increasingly fractious west Asia.

There has been a widespread concern that despite the historic nature of Indian-Iranian ties, the relationship has been struggling in the last few years. It needs to revive and revise fast. Modi's visit is the most important signal that Delhi is ready to put its money where its mouth is.

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The Modi government has moved ahead on a number of initiatives with Iran in recent months. Not only has India finalised the draft Chabahar Agreement - also known as the International Transport and Transit Corridor Agreement - with Afghanistan and Iran but a preliminary agreement on developing Farzad B gas field has also been accomplished during the visit by the minister for state for petroleum and natural gas, Dharmendra Pradhan, to Iran last month.

These projects have been languishing for quite some time, much to Tehran's consternation. India and Iran have been talking about Chabahar since 2002, while the initial agreement for exploration and development of Farzad B gas field was signed with a consortium of three Indian state companies in 2000.

Invest

During his recent visit to Iran, Pradhan offered to invest up to $20 billion in oil, petrochemicals and fertiliser projects in joint ventures with Iran if Tehran provides land and gas at concessional rates.

He also expressed an interest in setting up an LNG plant and a gas cracker unit at Chabahar. The official lifting of Western sanctions against Iran in January 2016 has expanded the scope of Indian-Iranian engagement significantly and Delhi is trying to recalibrate its Tehran policy. Iran's crude oil exports to India are now three times higher compared to last year.

Delhi has signed an air services agreement with Tehran, enhancing the number of flights between the two nations and allowing each other's airlines to operate to additional destinations. The two sides have also inked a memorandum of understanding that is aimed at increasing bilateral trade to $30 billion from $15 billion.

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Plans are afoot for greater maritime cooperation, and Iran has already joined the Indian Navy's annual initiative, the Indian Ocean Naval Symposium, which provides a forum for the navies of the Indian Ocean littoral states to engage with each other.

After years of dilly-dallying by the UPA government, the Modi government decided last year to invest $85.21 million in developing the strategically important Chabahar Port in Iran, allowing India to circumvent Pakistan and open up a route to landlocked Afghanistan.

The port, located 72km west of Pakistan's Gwadar Port, holds strategic and economic significance for India. It is already connected to the city of Zaranj in Afghanistan's south-western province of Nimruz and can serve as India's entry point to Afghanistan, Central Asia and beyond.

New Delhi and Tehran both view Chabahar as critical to developing connectivity with Kabul and as a geopolitical lever vis-à-vis Pakistan. This is a high-priority issue for the Modi government.

Powers

The geopolitics of west Asia is always a difficult one to traverse, even for great powers, as the US has found to its considerable cost. Today, the Obama administration is desperately trying to reduce its equities in a region that has been in perpetual turmoil, partly due to external interference and partly due to internal contradictions. This has led to an even greater regional turmoil in the process.

Enter China in an attempt to gingerly probe its ability shape a new regional order. Chinese President Xi Jinping's visit to Iran, Egypt and Saudi Arabia earlier this year was aimed at gaining greater political and economic salience in a region where it has been reluctant to get involved so far.

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But as the balance of power in the region unravels, new equations are emerging and older paradigms are no longer sufficient to engage the region. The most significant disruption to the Indian-Iranian relationship has come in the form of China, which is now Tehran's largest trading partner.

Beijing has invested massively in Tehran, with more than 100 Chinese companies on the ground seeking to occupy the space vacated by Western firms that had grown skittish about international pressure on the country.

The partnership with China benefits both sides: Iran evades global isolation by courting China, which in turn gains access without any real competition to Iran's energy resources.

Pressure

India has always enforced dutifully any United Nations measures against Iran, often to the detriment of its energy investments in the country. Yet China, which as a member of the Security Council helps shape UN policy towards Iran, has been able to sustain its own energy business in the country without much trouble.

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Modi's high-profile visits to the UAE and Saudi Arabia have been aimed at isolating Pakistan and enhancing Delhi's strategic space in the region. It's time now to push for a substantive reorientation in Indian-Iranian ties.

A thaw in US-Iran relations, heralded by the new nuclear understanding between the two, should allow India to push forth with a more purposeful regional engagement with Iran. Modi's visit should be the beginning of this reorientation.

(Courtesy of Mail Today.)