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Uncertain Future for Iran-Indian Relations

Many reports on the Chabahar development project have highlighted the fact that India is moving ahead with it despite American warning that Iran is not yet open for business, as the nuclear deal that would lead to removal of economic sanctions has not yet been completed. While this does seem to suggest that India is defying the US State Department’s insistence upon caution from US allies, it is worth noting that India has nonetheless taken measures to make sure that it is still in compliance with US-led sanctions.

India is Iran’s second largest Asian oil importer after China, and its imports of Iranian crude have increased in the past year, contributing to fears among some critics of the nuclear talks who say that the promise of a nuclear accord is leading some governments and businesses to treat Iran as a newly opened market. However, in March, India cut its Iranian oil imports to zero in an effort to help the US keep Iran’s total sales under an imposed annual limit.

Indian respect for US-led sanctions has had other consequences, as well. Just a day before the story of the Chabahar development project broke, it was reported that Iran had canceled another planned joint development project, out of frustration with delays that are largely attributable to sanctions.

Iran and India had been planning to jointly develop the offshore Farzad-B gas field, which is believed to hold some 13 trillion cubic feet of gas. But Iran recently alleged that India had not taken any serious steps on the project since 2009. The subsequent cancellation may be viewed as punishing India, but it is sure to also have adverse effects on prospects for Iranian economic recovery.

In either case, the Farzad-B issue suggests greater strain in Iranian-Indian relations than the reaction to the Chabahar port news would seem to suggest.

What’s more, the reasons behind the port project may be more complicated than a simple expansion of Iranian-Indian relations. The First Post report on this points out that India’s move was likely spurred on by similar collaboration between Pakistan and China on the Gwadar port that is further along the coast of the Gulf of Oman.

In this sense, the Iran-India joint venture may be seen more in terms of an adversarial relationship with Pakistan than a friendly one with Iran. Furthermore, the implicit competition has the potential to complicate relations between China and Iran, which some analysts have worried are on the verge of establishing a major Asian bloc alongside Russia, which would present a unified front against Western interests.

While this remains a danger, the complex geo-politics of the region make it unlikely that India would contribute to such an Asian bloc as long as it enjoys good relations with the US and considers itself an enemy of Chinese-allied Pakistan.


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