Prime Minister Narendra Modi was among the first foreign leaders to congratulate Iran’s ultraconservative Chief Justice, Ebrahim Raisi, after he was elected to be his country’s next President. “I look forward to working with him to further strengthen the warm ties between India and Iran,” Modi posted on Twitter on June 20, shortly after Raisi won the presidential elections, which left the moderates in the West Asian nation sidelined and brought the hardliners back to power.
New Delhi is expected to seek early engagement with Raisi’s Government in Tehran after he takes over from Hassan Rouhani, who will step down on August 2 after completing two consecutive terms in the office of the President. With Pakistan keen to get a “strategic depth” in Afghanistan after the withdrawal of the US troops from the conflict-ravaged country and its ‘iron brother’ China trying to expand its footprints in the region, India will obviously want to move fast to ease strains in its ties with Iran.
But what is likely to determine the pace and course of the Modi Government’s engagement with the new regime in Tehran is the outcome of the negotiation in Vienna between Iran and the United States for the revival of the 2015 nuclear deal.
Notwithstanding the civilisational links between the two nations, the relations between New Delhi and Tehran faced challenges over the past one-and-a-half decades, primarily due to growing ties between India and the United States, particularly after the landmark 2008 nuclear deal, and the acrimony between Iran and the United States. The sanctions imposed by the US on Iran forced New Delhi to curtail trade and economic links with the Persian Gulf nation, which was always considered to be a part of the extended neighbourhood of India.
New Delhi's economic relations with Tehran regained momentum after President Barack Obama’s administration in Washington D.C. eased sanctions on Iran following the July 14, 2015 agreement between Tehran and the five permanent members of the United Nations Security Council – United States, United Kingdom, France, Russia and China – as well as Germany and the European Union.
Obama’s successor Donald Trump in May 2018 withdrew the US from the July 2015 deal. The US reimposed sanctions on Iran six months later. India had to buckle under US pressure and stop buying crude oil from Iran by June 2019. New Delhi managed to secure a waiver from the Trump Administration to continue its engagement with Tehran for development of the Chabahar Port. But Iran in July 2020 started laying tracks to build the proposed 750-kilometre railway line from Chabahar Port on its southeastern coast to Zahedan, the capital of its Sistan Baluchistan province closer to its border with Afghanistan and Pakistan. India was keen to build the railway line, as it was already involved in developing the Chabahar Port to get sea-land access to Afghanistan and Central Asia through Iran, bypassing Pakistan. But the US sanctions on Iran hindered progress on the project. So was the case with development of Farzad-B gas field, which too was put on the back-burner due to US sanctions. As a result, Tehran in January 2020 notified New Delhi about its decision to award the contract to an entity based in Iran.
The US is now again holding talks with Iran. Raisi, like other conservative candidates in the presidential polls, criticised Rouhani’s government during campaigning for signing the 2015 deal with the US and others. But, after winning the elections, he clearly stated that his government too would adhere to the agreement. He did not directly support Iran-US talks for revival of the deal, but signalled that the negotiation would continue. The prospects of President Joe Biden’s administration recommitting to the deal with Tehran already prompted New Delhi to signal that it would also restart importing crude oil from Iran and return to investing in infrastructure and hydrocarbon projects as and when the US would lift or ease sanctions on the Persian Gulf nation.
New Delhi is also keen to move fast to arrest the slide in its ties with Tehran, as it is worried over the proposed deal Iran is planning to sign with China securing a whopping $ 400 billion investment pledge by communist country in its infrastructure and energy sectors over the next 25 years. What also sent alarm bells ringing in New Delhi is Iran’s purported move to invite China and Pakistan to take part in the development of its Chabahar Port. Beijing and Tehran are learnt to have discussed a proposal to link the Chabahar Port with the China-Pakistan Economic Corridor – a flagship component of President Xi Jinping’s ambitious Belt and Road Initiative and a project opposed by India.
Xi too congratulated Raisi, underlining that China and Iran were “comprehensive strategic partners” and attached great importance to development of the relations between the two nations.
Tehran’s envoy to New Delhi Ali Chegeni recently argued for a reset in Iran-India ties, beginning with a trade agreement and a strategic energy partnership, including oil and gas pipelines either through sea or land. He suggested during a webinar that since the 2015 nuclear deal might be revived, India could work on its long-pending proposal of investing $20 billion in the free trade zone at Chabahar in Iran. He said that Iran would also welcome investments from Iran to set up petrochemical and fertiliser plants. “But the time is too short and opportunities will not remain forever,” Chegeni said, nudging New Delhi to move fast.
Tehran in the past generally avoided taking Islamabad's side whenever tension between India and Pakistan escalated, except for some occasional remarks on the situation in Kashmir. After the Modi Government on August 5, 2019 moved to strip Jammu and Kashmir (J&K) of its special status and reorganised the state into two Union Territories, Iran expressed concerns over “condition of people” in the valley and urged India to adopt “a fair policy” towards the people of the region. Rouhani’s Foreign Minister Javad Zarif, however, in March 2020 termed the clashes in North-East Delhi as “organised violence” against Muslims. His comment triggered strong protests from the Modi Government. But New Delhi still does not expect that Iran would ever start routinely echoing Pakistan to slam India – even after the moderate-to-conservative shift of power in Tehran.