New Openings for India in the US-Iran Thaw

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New Openings for India in the US-Iran Thaw

As the United States and Iran head toward a broader rapprochement, what does India stand to gain?

New Openings for India in the US-Iran Thaw
Credit: Flickr/ U.S. Department of State

Last week, P5+1 and Iranian diplomats in Lausanne, Switzerland, announced that they had reached a framework for a nuclear deal. The negotiations will now continue to work on technical issues as diplomats work toward a deadline for a comprehensive agreement at the end of June. The announced framework would permit Iran a limited nuclear enrichment capacity, but would subject its civil nuclear program to a strict and intrusive inspection regime. Iran, in exchange, would receive gradual relief from nuclear sanctions as it demonstrates compliance. Though the operationalization of the framework would not be easy, as a first cut the framework is fairly comprehensive with most important parameters duly accounted for.

The stakes are high for the West as benefits of a possible rapprochement with Iran potentially include the cessation of Iran’s nuclear ambitions, the opening of Iran’s vast domestic market to western trade and investment, the emergence of Iran as an alternative to Russia as a major oil and gas supplier to Europe, more effective solutions to dealing with regional problems such as Islamic State terrorism and the Syrian civil war, and an end to Iran’s deeply damaging 35-year political, cultural and human isolation. The Obama administration sees the Iranian government as a tactical partner in the Middle East though this remains controversial, given that U.S. allies — including Israel and Arab states helping tackle the Islamic State, like Saudi Arabia and the United Arab Emirates — feel threatened by Iran.

Iran has long been a litmus test that India has had to pass to satisfy American policy makers. New Delhi’s bond with Tehran has been termed variously by analysts as an “axis,” a “strategic partnership” and even an “alliance.” This level of scrutiny has always been disproportionate to the reality of the relationship. When in the past India had to choose between Iran and the United States, it always sided with the latter. As the US itself now gravitates towards Iran, new diplomatic possibilities open up for India.

India has been recalibrating its Iran policy for some time now. New Delhi has signed an air-services agreement with Iran 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. 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 each other.

More significantly, the two nations have decided to hold “structured and regular consultations” on Afghanistan. By deciding to provide a withdrawal timetable from Afghanistan, the Obama administration has unwittingly signaled to the Pakistani military that, as the U.S. reduces its presence in the war-scarred country, Islamabad is in a position to shape Afghanistan toward its own ends. Both India and Iran are, however, unlikely to accept an Afghanistan that serves as a springboard for the Pakistan military’s interests.

After years of dilly-dallying under the UPA government, the Modi government has decided 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. Iran’s Chabahar Port, located 72 kilometers west of Pakistan’s Gwadar port, holds immense strategic and economic significance for India. It is already connected to the city of Zaranj in Afghanistan’s southwestern province of Nimruz and can serve as India’s entry point to Afghanistan, Central Asia and beyond. Delhi and Tehran both view Chabahar as critical to developing connectivity with Kabul and as a geopolitical lever vis-à-vis Pakistan. This issue is one of high priority for the Modi government.

On Iran’s nuclear aspirations too, India has been making subtle changes in its approach. After voting repeatedly in favor of IAEA resolutions condemning the Iranian nuclear program, New Delhi has been emphasizing that dialogue and diplomacy are its preferred means of defusing nuclear tension. India has expressed particular disapproval of sanctions by individual countries that restrict other countries’ investments in Iran’s energy sector. Despite existing sanctions, New Delhi is encouraging Indian companies to invest in Iranian energy so that economic connections can underpin a political realignment, not foreclose it.

The most significant disruption to this relationship has come in the form of China, which is now Iran’s largest trading partner. China has invested massively in Iran, with more than 100 Chinese companies on the ground and seeking to occupy the space vacated by Western firms that have grown skittish about mounting 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.

India has always enforced dutifully any UN measures against Iran, often to the detriment of its energy investments in the country. Yet China, which as a member the Security Council helps shape UN policy toward Iran, has been able to sustain its own energy business in the country without much trouble. So India is right to feel restless about its marginalization within Iran, which has occurred despite strong cultural bonds connecting the two nations. Iran is an important partner for India when it comes to fulfilling the burgeoning energy requirements of the latter.

India has been trying to strike a balance between preserving its strategic interests and adhering to its global obligations. Its ability to maneuver in Tehran has been limited so far because of Iran’s inability to find a workable solution with the West on its atomic ambitions. As Shia-Sunni divide fractures the Middle East and as American outreach to Iran begins to re-shape the strategic environment of the Middle East, Indian diplomacy will be forced to navigate these tricky waters with diplomatic finesse. The certainties of the past with which New Delhi has lived so far are coming to an end and a new uncertain landscape will challenge Indian foreign policy in the coming years. New Delhi will have to move away from the ideological trappings of the past where domestic political imperatives continue to constrain India’s options. A thaw in U.S.-Iran relations, heralded by the new nuclear understanding between the two, should alleviate some of Indian concerns and will allow it to push forth with a more purposeful regional engagement.