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Modi's upcoming Visit to Iran: Challenges and Expectations
Siddharth Singh
2016-05-13
Region : Middle East-North Africa/India,
Issue : Security, Terrorism,
Delhi and Tehran have a robust and comprehensive relationship inclusive of energy and other forms of commercial cooperation, infrastructure development in Iran and beyond, as well as military and intelligence ties. These bilateral developments have enjoyed widespread support among Iranian and Indian polities. If we go back little deep in history then on March 15, 1950, New Delhi and Tehran signed a friendship treaty which called for “perpetual peace and friendship” between the two states. In principle, this document committed the two to amicable relations; however, in practice, both states were mired—albeit to differing extents at different times—in opposing Cold War alliances that precluded the development of robust bilateral ties. Although India largely welcomed Iran’s 1979 Revolution as an expression of national self-assertion, and although the post-revolutionary Iranian leadership was generally well disposed towards India, significant differences persisted between New Delhi and Tehran. Iran was more critical of the Soviet invasion of Afghanistan than was India.
Economics:
India-Iran enjoys economic and commercial ties covering many sectors. However, the trade relations have traditionally been buoyed by Indian import of Iranian crude oil resulting in overall trade balance in favour of Iran. The India-Iran bilateral trade during the fiscal 2015-16 was approximately USD 15 billion. India imported US$ 10 billion worth of goods mainly crude oil and exported commodities worth US$ 5 billion. The unilateral economic sanctions imposed on Iran have had an adverse effect on the bilateral trade as the international banking channels have gradually become non-existent. India and Iran hold regular bilateral discussions on economic and trade issues within the framework of India-Iran Joint Commission Meeting (JCM). The 18th India-Iran JCM was held in New Delhi on 28 December, 2015.
Iran and India are both optimistic about the commercial benefits of Central Asian markets and hope to share the spoils of the North-South Transit Corridor. Iran requires massive infrastructure investments to extract maximum benefits from this corridor, and India is lined up to provide cost-effective intellectual and material assistance in the development of information technology networks, ports, roads, and rail projects. Iran, for its part, needs a partner like India with a sophisticated and complex set of international relations.
Iran also has an expectation that India will provide expertise in electronics and telecommunications as well as upgrades for many of its legacy Russian weapons systems. While little in this regard has materialized but still negotiations in this area are on track. Iran is also seeking combat training for missile boat crews and hopes to purchase simulators for ships and subs from India.
Strategic:
If we look at the bilateral relation from a strategic point of view then India’s strategic interest lies in the entire Indian Ocean basin. The westernmost frontier of this strategic area stretches to the Strait of Hormuz and the Persian Gulf. India needs Iran to achieve its varied objectives in Central Asia. Iran also sees a tremendous complementarity of interest with India. So Tehran and Delhi derive benefits from their relationship domestically and internationally. While these two countries have been talking about “strategic relations” for some time with few concrete results, the last few years have witnessed ostensibly substantive advances. India and Iran also established a joint working group on counterterrorism and counter-narcotics, reflecting their mutual security concerns in these functional areas.
Both Iran and India share concerns about the domestic security situation in the Central Asian states and are wary of the multitude of security threats that Pakistan poses to the region and beyond.
India should have a formal agreement with Iran so as to access Iranian military bases in the event of war with Pakistan. This would also permit India to rapidly deploy troops and surveillance platforms as well as military equipment in Iran during times of crisis with Pakistan. If such kind of deal happens then this will be a turning point in regional relations and it will also, in principal, put Iran in opposition to Pakistan. Indian and Iranian troops should conduct combat training and joint naval exercise by the respective navies of the two country so as to have an “operational and combat training on warships and missile boats.”
India and Iran have enjoyed good maritime relations that include high-level political and military visits, joint-naval exercises, naval technology cooperation, and maritime infrastructure developments symbolized by port development in Chahbahar. Naval cooperation between the two sides dates back to the mid-1990s when the Indian Navy helped the Iranian Navy to adapt four Russian-built Kilo-class submarines for warm water conditions in the Persian Gulf. India is assisting with the development of the Iranian port at Chabahar, located on the coast of the Gulf of Oman. The reason behind this endeavor is linked to geopolitical rivalry and strategic alliances in the Indian subcontinent.
Energy:
Keen to step up engagement in the hydrocarbon sector with Iran, India has conveyed to the Persian Gulf nation that it is ready to clear nearly $6.5 billion of the dues for oil import from that country at the earliest, provided there was clarity on payment channel. India has also shown its keenness to Iran that it is willing to Indian companies could invest up to $20 billion and were interested in setting up petrochemical and fertilizer plants, including in the Chabahar SEZ, either through joint venture between Indian and Iranian public sector companies or with private sector partners. Petroleum minister Dharmendra Pradhan and external affairs minister Sushma Swaraj had visited Iran in last 2 month during which they had conveyed to Iranian leaders that India wants to significantly ramp up engagement in oil and gas sector with that country. Following lifting of sanctions against Iran, India has been eying deeper energy ties with Iran. New Delhi is looking to increase engagement with the sanction-free Iran by raising oil imports and possible shipments of natural gas. It also wants rights to develop Farzad-B gas field in the Persian Gulf discovered by OVL.
Conclusion:
Hoping to raise India’s relations with Iran to a new level, Prime Minister Narendra Modi will visit Tehran on May 21 where he will meet with Iran’s Supreme Leader Ayatollah Ali Khamenei. The Modi-Khamenei meeting will be closely watched, especially by Israel, Pakistan and the United States.
Views expressed are of the author and do not necessarily reflect the views of FORE INDIA.

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