Latest revision as of 21:14, 15 May 2024

[edit] Chabahar

See Chabahar

[edit] YEAR-WISE DEVELOPMENTS

[edit] 2014

[edit] Imposition of economic sanctions by the UNSC

The Times of India, Jul 20 2015

India- Iran, export and import, year-wise 2000-14; Graphic courtesy: The Times of India, Jul 20 2015

Following the report by the International Atomic Energy Agency regarding Iran’s noncompliance with safeguard agreements and Iran’s nuclear activities, the UNSC imposed a series of economic sanctions. The first of these sanctions were imposed in December 2006. An analysis of India’s trade with Iran shows a significant increase after these sanctions. Iran’s exports of goods to India were 1.8% of its total exports in 2000. This increased to 15.9% in 2014. In this period, Iran’s imports from India as a proportion of its total imports also increased from 1.8% to 5.1%.

[edit] 2018

[edit] Importance of Iran despite US sanctions

Indrani Bagchi, Iran will remain key to India’s foreign policy matrix, July 1, 2018: The Times of India

The Importance of Iran despite US sanctions, 2018
From: Indrani Bagchi, Iran will remain key to India’s foreign policy matrix, July 1, 2018: The Times of India

India can live without Iranian energy, but Tehran will remain a very important part of New Delhi’s foreign policy. As the US under Donald Trump takes an extreme view of sanctions against Iran, it may constrain India’s manoeuvring space significantly, if New Delhi is not careful.

Iran moved back into third place as a source for energy in 2016, soon after the Joint Comprehensive Plan of Action (JCPOA) unshackled global engagement with Tehran. But with the US openly calling for “zero” (oil imports) by November 4, things begin to look difficult. Notwithstanding the government’s brave words, Indian companies, banks, even oil PSUs, are scaling back.

During the earlier round of sanctions, India, like China and Japan, got a sanctions waiver because they “demonstrated” reductions (about 20% every 6 months). The trouble with buying Iranian oil in Indian currency remains the same — while Iran has tons of things it wants to buy from China, there’s very little it wants to buy from India beyond basmati rice and some pharmaceuticals. Post sanctions, the rupeerial deal has not yet taken off.

A bigger issue is connectivity. Energy may have dominated the last round of sanctions, but the focus is on multi-modal connectivity now. India needs Iran for a link to Central Asia and Russia. India wants to use the Chabahar port not only as an access point for Afghanistan, but also as athe International North-South Corridor (INSTC). India’s connectivity ambitions were made clear after it signed on to the TIR Convention and the Ashgabat Agreement on multi-modal transport.

Transport Minister Nitin Gadkari has promised to make Chabahar fully operational by 2018. But now that’s uncertain. The project is a win-win — it connects India but also provides a viable alternative to Pakistan as a route. Chabahar and INSTC is key to India’s geo-political ambitions of providing an alternative to China’s One Belt, One Road with a very different collaborative philosophy.

A carve-out for Chabahar was written into the US sanctions the last time round, as it was connected to Afghanistan. Logically, India could hope for a similar provision this time too. But Washington is seen as unpredictable these days. In addition, there has been virtually no high-level contact between the Modi government and key members of the Trump team in the past few months.

In the 1990s, India and Iran were on the same page regarding Afghanistan, when both countries supported the Northern Alliance against the Pak-Saudi supported Taliban. Now, Iran is on a different wavelength. Iran, like Russia, is more sympathetic to the Taliban, seeing them as a buffer against US presence and the growing footprint of IS. That has put a wedge with New Delhi. But as a friendly nation to the west of Pakistan, Iran remains invaluable to India.

India’s Iran woes have few sympathisers — not the US, and definitely not India’s closest partners in the Gulf and Middle East, all of whom have so far held their noses at New Delhi’s ties with Tehran. Israel and Saudi Arabia would lead the cheering squad if India has to scale back ties with Iran, as would the UAE.

India opposes terrorism as much as it opposes another country acquiring nuclear weapons in its neighbourhood. That puts India in a very different space, and much closer to the US. While India welcomed the JCPOA when it was signed in 2015, a decade prior, it had voted against Iran twice at the IAEA signalling its opposition to Tehran’s budding nuclear programme.

The question is no longer whether India can survive US sanctions. It can. But with its economy becoming more integrated with the world, does India want to subject itself to secondary sanctions from the US, specially with a vast private sector that would take the rap? The EU revived an older law that promises its companies compensation if they come under US sanctions. Despite this, energy biggies like Total and Shell have already pulled out from Iran.

India needs Iran for a link to Central Asia and Russia. India wants to use the Chabahar port not only as an access point for Afghanistan, but also to link it to the International North-South Corridor

[edit] Nine pacts deepen ties further

Nine pacts deepen Iran ties further, February 18, 2018: The Times of India

Agreements signed between Iran and India, as in February 2018
From: Nine pacts deepen Iran ties further, February 18, 2018: The Times of India

Iran may be faced with US sanctions but that did not come in the way of India looking to further ramp up its economic ties with Tehran with focus on connectivity, energy, trade and investment when PM Narendra Modi met Iranian President Hassan Rouhani here on Saturday. The two countries signed nine agreements, including a lease contract which will allow an Indian company to take over for 18 months operational control of facilities at Shahid Beheshti Port in Chabahar.

Thanking Rouhani for his contribution to the development of Chabahar port, Modi said India will support construction of the Chabahar-Zahedan rail link in Iran to allow Chabahar gateway’s potential to be fully utilised.

Port project a message to US that India is committed to Chabahar

We want to expand connectivity, cooperation in the energy sector and the centuries-old bilateral relationship, said Modi.

The port project is important for India as it will allow it to bypass Pakistan in accessing not just Afghanistan but also central Asian countries. The agreement is also a message to the US that India remains committed to Chabahar despite the US threat to tighten sanctions on Iran.

India and Iran also signed an agreement for avoidance of double taxation and prevention of fiscal evasion “with respect to taxes on income”.

Amid growing bonhomie with Israel, India is hoping that Rouhani’s visit and also Modi’s own recent visit to Palestine will help dispel the notion that its West Asia policy is no longer on an even keel. For trade and investment, the two leaders recognised the need to put in place an effective banking channel.

[edit] See also

Chabahar

Iran- India relations