Iran: Friendship at Stake?

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TOPIC: General Studies 2

• Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
• Effect of policies and politics of developed and developing countries on India’s interests

In News: Iran criticised India for not fulfilling its promise of making investments in expansion of the strategically located Chabahar port and said New Delhi will stand to lose “special privileges” if it cuts import of Iranian oil.

Background:

• The US has told India and other countries to cut oil imports from Iran to “zero” by November 4 or face sanctions.
• Iran will end the privileges being provided to India if it tries to source oil from countries like Saudi Arabia, Russia, Iraq, the US and others to offset cuts in Iranian oil.
• As for the US sanctions on oil import from Iran: Iran has been a reliable energy partner for India and follows a “rationale pricing” of oil which ensures the interest of both consumers and suppliers.

Chabahar Port – A Golden Opportunity

The Chabahar port is considered as a gateway to golden opportunities for trade by India, Iran and Afghanistan with central Asian countries in the wake of Pakistan denying transit access to New Delhi. It can be a major link for trade with war-ravaged Afghanistan.

In May 2016, India, Iran and Afghanistan had inked a pact which entailed establishment of Transit and Transport Corridor among the three countries using Chabahar Port as one of the regional hubs for sea transportation in Iran, besides multi-modal transport of goods and passengers across the

Key Points:

• On the Gulf of Oman; the only oceanic port of the country.

• Easily accessible from India’s western coast and is increasingly seen as a counter to Pakistan’s Gwadar Port, being developed with Chinese investment
• Jointly being developed by India, Iran and Afghanistan
• In the 1980s, during the Iran-Iraq war, it was developed as a strategic-economic port
• “Chabahar” literally means a place where all four seasons of the year are like spring.

• To make it a commercially and strategically viable option, Indian policymakers will have to use the Chabahar project as a lynchpin to integrate it with its larger connectivity project — the International North South Transport Corridor (INSTC).
  • The INSTC, initiated in 2000 by Russia, India and Iran, is a multi-modal transportation route linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran, and onward to northern Europe via St Petersburg in Russia.
  • The INSTC envisages the movement of goods from Mumbai, India to Bandar Abbas, Iran, by sea, from Bandar Abbas to Bandar-e-Anzali, an Iranian port on the Caspian Sea, by road, from Bandar-e-Anzali to Astrakhan, a Caspian port in the Russian Federation, by ship across the Caspian Sea, and thereafter into the Russian Federation and further into Europe by Russian Railways.

Conclusion:

• If India sticks to its own part of the national interests of security energy, they will be able to face the pressure from the United States and stand on its own ground. India is now seen as an important player in terms of foreign policy so a little more of gut is required at this stage to respond to situation.
• Iran understands the difficulties of India in dealing with the unstable energy market and it has done and will do it’s best to ensure security of supply to India while offering various flexibility measures which facilitates our bilateral trade in particular.
• The relation between the two countries goes back in history and we have to foster this relation in the near future. It is important to work together to immunise the relationship between the two countries through adoption of necessary instruments and mechanisms.

Note:

• Iran is India’s third-largest oil supplier after Iraq and Saudi Arabia. Iran has offered refiners incentives including almost-free shipping and an enhanced credit period on oil sales.

Must Read: Link 1 + Link 2

Connecting the Dots:

1. What should be India’s approach to Iran keeping in mind the recalibrated stance of the US in the region? Discuss.