Chabahar: India's gateway to Iran, Af, Central Asia

During his 2001 Iran visit, then prime minister A B Vajpayee addressed Iran’s Parliament, met with Ayatollah Khomeini, and dedicated a square named after Maulana Abul Kalam Azad in Shiraz. In 2003, Iranian President Mohammad Khatami visited India as the chief guest at the Republic Day celebrations and the two countries resolved to develop the Chabahar port that is located in southeast Iran close to the strategically important Strait of Hormuz.

A year later, India and Iran jointly issued stamps commemorating saint-poets Kabir and Hafiz. During this period, the two countries cooperated on diverse fronts ranging from Afghanistan to Antarctica. However, the growing relationship was derailed by US sanctions on Iran. Unfortunately, India’s attempt to tread the middle ground was not appreciated by either Iran or the US. A decade later, few remember the warmth of the Vajpayee-Khatami era. Will India and Iran manage to reset the relationship as the latter emerges from sanctions?

India and Iran share a millennia-old relationship. India has the largest Shia population and Persian language archives outside Iran. Persian was the official language in parts of India until the 18th century (Initially, Europe accessed Sanskrit literature through Persian translations). India played an important role in the development of printing in Persian language.

Presently, thousands of Iranians study in India and Iran’s theological seminaries attr-act hundreds of Indians. Iranians are among the highest paid players of India’s Pro-Ka-baddi League. Iran has landmarks named after Mahatma Gandhi, Maulana Azad and Ustad Bismillah Khan, while India has landmarks named after Imam Khomeini.

Incidentally, Khomeini’s ancestors were known as Hindi. They had migrated from Iran to the Lucknow region in the late-18th century and left for Najaf in the mid-19th century before settling in Khomein in Iran.

Despite the longstanding cultural bonds and natural complementarities in the energy sector, the contemporary Indo-Iranian relationship has been driven by immediate geopolitical considerations. Initially, Iran’s membership of the pro-US Central Treaty Organisation that included Pakistan and India’s pro-Arab tilt and its commitment to the Non-Aligned Movement limited the scope for cooperation.

Also, Iran, whose northern periphery has a significant Turkic-speaking population, feared the USSR that had close relations with India. The outbreak of the Iran-Iraq War (1980-88) meant that the relationship did not pick up even after Iran joined the Non-Aligned Movement in 1979. Moreover, in 1980s, India began to tilt towards the US, while Iran swung in the opposite direction.

The relationship deepened in the 1990s and early 2000s. However, the US nuclear diplomacy almost trapped India and Iran in a zero-sum game forcing them to independently fight for space in the American world order. The US sanctions on Iran forced India to scale down its imports of Iranian oil and freeze work on oil and gas exploration, the Iran-Pakistan-India pipeline, the Chabahar port, and the International North-South Transport Corridor. The Baloch insurgency in Iran’s Sistan and Baluchistan and sustained increases in petroleum prices further constrained India.

India’s renewed focus on Iran is driven by the need to diversify energy imports, the withdrawal of US forces from Afghanistan and Iraq, the growth of religious extremism in West Asia, the relaxation of US sanctions against Iran, and the need to secure access to Afghanistan and energy-rich Central Asia. On the other hand, Iran is looking for partners to rebuild its economy. India can provide Iran with cost-effective space, pharmaceutical and information technologies and can also help Iran to refurbish its ageing military hardware and transport and power infrastructure.

Chabahar can serve as the hub for Iran’s energy exports to India and also help India to bypass Pakistan and access landlocked Afghanistan – the only SAARC country that does not have a land/maritime border with India and Central Asia. Chabahar will also help decongest the Iranian port of Bandar Abbas, enable Iran to handle heavier cargoes without trans-shipment to other countries, and maintain Iran’s trade flows in the case of a conflict in the Persian Gulf. Moreover, the port at Chabahar will boost development in the economically-backward Sistan and Baluchistan province that is home to Shia Iran’s Sunni minorities.

Strategic interests
Chabahar’s significance is not limited to economics though. The port can reduce the dependence of Central Asian Republics upon China and Russia and also Afghan-
istan’s dependence upon Pakistan by providing these countries with another access to the ocean. So, the economic and strategic interests of India and Iran converge in Chabahar. It is in this context that Chabahar has emerged as the touchstone for the future of the Indo-Iranian relationship.

Since January this year, the two countries have exchanged a number of high-level visits and hosted each other’s warships, whereas the prime minister met with the Iranian President in Ufa. In May 2015, ahead of the July 2015 nuclear deal between Iran and the West, India signed a memorandum of understanding with Iran to develop the Chabahar port.

In late September/early October, one could sense the priority New Delhi attached to Iran when it indicated that it was prepared to invest as much as US$30 billion in Chabahar and related projects. However, protracted negotiations over the price of gas seem to have stalled progress.

Given the importance of Chabahar and the transport corridor leading up to Afghanistan and Central Asia, the government needs to urgently rebuild the momentum it lost during the Bihar elections. Disagreements over gas price and other minor irritants should not be allowed to eclipse the broader relationship, particularly after Iran has signalled that it does not view India’s relations with Gulf countries and Israel in zero-sum terms.

New Delhi and Tehran must seize the opportunity and invest in each other’s petroch-emical industries, build the Iran-Oman-India pipeline, upgrade the shipping and bank-
ing ties, and promote people-to-people ties.

(The writer teaches economics at Azim Premji University, Bengaluru)