<p>After Prime Minister Narendra Modi’s visit to Tehran last year (May 22-23), it was hoped that India and Iran would expedite work on long-pending infrastructure projects and make up for the lost decade. It was also hoped that they would insulate their ties from the state of their relationships with other countries.<br /><br />The progress on infrastructure projects centred on the Chabahar port has been sluggish while the relationship in the energy sector is far from stable. India has reportedly decided to reduce its oil purchases to convey its disappointment at the delay in award of rights to develop the Farzad-B gas field to ONGC Videsh Ltd. Iran retaliated by withdrawing concessions to Indian refiners. Unfortunately, despite shared interests, India and Iran have allowed their relationship to drift.<br /><br />The drift can possibly be explained, among other things, by political uncertainty in Iran in the run-up to the presidential election, Iran’s preoccupation with West Asian conflicts, and India’s sensitivity to rising US-Iran tensions. While the first two are beyond our control, the government should have been better prepared to deal with the last.<br /><br />Amidst the United States’ rebalancing in favour of Saudi Arabia and hardening stance against Iran, India has reportedly slowed down work on the proposed and ongoing projects in Iran. If true, India once again seems to be allowing third countries to influence its relationship with Iran. <br /><br />The two years following the nuclear deal between Iran and P5+1 should have been used to ensure that India’s fresh initiatives in Iran would not be vulnerable to outside pressures. The failure in this regard might be explained by the political leadership’s inability to provide Iran the attention it deserves and bureaucratic apathy in the absence of a clear political mandate.<br /><br />In fact, India’s Iran policy is surprisingly devoid of imagination. The bilateral cooperation on developing ports, transport corridors and energy resources is important, but this is something that should/could have been done a decade ago. Work on these projects will make up for the delay after, say, 2003. But, where is the vision and foundation for a 21st century partnership with Iran?<br /><br />Prime Minister Modi has tried to leverage India’s strengths in new economy sectors such as information technology and space technology in foreign policy. He has also tried to harness cultural and religious ties to strengthen relations with other countries. His visit to an all-women BPO centre operated by the TCS in Saudi Arabia, the recently launched South Asia Satellite, and the proposed Varanasi-Colombo flight are cases in point. <br /><br />So, it is intriguing that the prime minister stuck to brick-and-mortar projects to bond with Iran and did not explore the potential for building bonds in the new economy or leveraging the existing ties in fields such as education. Moreover, he only superficially touched upon the older cultural/religious bonds.<br /><br />India should promote ties in high-skills sectors such as information technology, pharmaceuticals, biotechnology and space technology. Iran should not be viewed as a passive consumer but rather as a partner because Iran has a very large and well-trained workforce by the West Asian standards. <br /><br />Moreover, Iran has experimented with different technologies under the sanctions regime. The diversification of the economic relationship will also partly shield the overall bilateral relationship from occasional disappointments due to “delays” in brick-and-mortar projects.<br /><br />However, the US is a key obstacle in this regard. India’s new economy is dominated by private companies that are deeply interconnected with the US economy, which is both the biggest market as well as a major source for finance, technology, and ideas (in fact, even government organisations such as Isro are to some extent vulnerable to potential US sanctions against Iran and the same holds for financial institutions). <br /><br /><br />Volatile ties<br /><br />Given the volatile US-Iranian relationship, private companies cannot risk investing in Iran. Post-sanctions, the private sector’s interest in Iran has been limited to purchasing more oil. Otherwise, the private sector has shown interest wherever (and to the extent) the Indian government is itself directly involved such as in the Chabahar port.<br />The Trump administration is pursuing ‘America First’ approach and has not shown willingness to accommodate India’s economic and strategic interests. India needs to find means of independently pursuing its interests in Iran without deferring to the US. I am reminded of a suggestion of Iran’s Ambassador to India Gholamreza Ansari in the context of India’s growing ties with Israel. He said, “If they [Israel] are your friends, don’t let them choose your enemies.” This applies to India’s relationship with the US as well.<br /><br />It needs no emphasising that close and stable political and economic relations with Iran have to be an integral part of any ‘India First’ policy. Iran is one of the biggest suppliers of oil and gas in the world and among the major suppliers located closest to India. Also, Iran shares a direct border with Central Asia that lies on both sides of the Caspian Sea. <br /><br />So, Iran is indispensable not only for India’s energy security, but also for providing resource rich Central Asia with an alternative access to the sea bypassing China, Pakistan, and Russia. Moreover, Iran can reduce Afghanistan’s dependence upon Pakistan by providing it with an alternative access to the sea.<br /><br />The stability of India’s relationship with Iran will depend on the speedy completion of infrastructure projects, a partnership in the new economy, and greater people-to-people contacts. At the moment, the bilateral relationship is standing on just one wobbling leg. Given the understandable reluctance of the private sector to invest in Iran, the onus is on the Indian government to find ways of leveraging the country’s strengths in, say, the new economy to build a strong partnership with Iran. The government also needs to encourage tourism and educational exchanges to promote people-to-people contacts.<br /><br /><em>The writer teaches at Azim Premji University, Bengaluru</em></p>
<p>After Prime Minister Narendra Modi’s visit to Tehran last year (May 22-23), it was hoped that India and Iran would expedite work on long-pending infrastructure projects and make up for the lost decade. It was also hoped that they would insulate their ties from the state of their relationships with other countries.<br /><br />The progress on infrastructure projects centred on the Chabahar port has been sluggish while the relationship in the energy sector is far from stable. India has reportedly decided to reduce its oil purchases to convey its disappointment at the delay in award of rights to develop the Farzad-B gas field to ONGC Videsh Ltd. Iran retaliated by withdrawing concessions to Indian refiners. Unfortunately, despite shared interests, India and Iran have allowed their relationship to drift.<br /><br />The drift can possibly be explained, among other things, by political uncertainty in Iran in the run-up to the presidential election, Iran’s preoccupation with West Asian conflicts, and India’s sensitivity to rising US-Iran tensions. While the first two are beyond our control, the government should have been better prepared to deal with the last.<br /><br />Amidst the United States’ rebalancing in favour of Saudi Arabia and hardening stance against Iran, India has reportedly slowed down work on the proposed and ongoing projects in Iran. If true, India once again seems to be allowing third countries to influence its relationship with Iran. <br /><br />The two years following the nuclear deal between Iran and P5+1 should have been used to ensure that India’s fresh initiatives in Iran would not be vulnerable to outside pressures. The failure in this regard might be explained by the political leadership’s inability to provide Iran the attention it deserves and bureaucratic apathy in the absence of a clear political mandate.<br /><br />In fact, India’s Iran policy is surprisingly devoid of imagination. The bilateral cooperation on developing ports, transport corridors and energy resources is important, but this is something that should/could have been done a decade ago. Work on these projects will make up for the delay after, say, 2003. But, where is the vision and foundation for a 21st century partnership with Iran?<br /><br />Prime Minister Modi has tried to leverage India’s strengths in new economy sectors such as information technology and space technology in foreign policy. He has also tried to harness cultural and religious ties to strengthen relations with other countries. His visit to an all-women BPO centre operated by the TCS in Saudi Arabia, the recently launched South Asia Satellite, and the proposed Varanasi-Colombo flight are cases in point. <br /><br />So, it is intriguing that the prime minister stuck to brick-and-mortar projects to bond with Iran and did not explore the potential for building bonds in the new economy or leveraging the existing ties in fields such as education. Moreover, he only superficially touched upon the older cultural/religious bonds.<br /><br />India should promote ties in high-skills sectors such as information technology, pharmaceuticals, biotechnology and space technology. Iran should not be viewed as a passive consumer but rather as a partner because Iran has a very large and well-trained workforce by the West Asian standards. <br /><br />Moreover, Iran has experimented with different technologies under the sanctions regime. The diversification of the economic relationship will also partly shield the overall bilateral relationship from occasional disappointments due to “delays” in brick-and-mortar projects.<br /><br />However, the US is a key obstacle in this regard. India’s new economy is dominated by private companies that are deeply interconnected with the US economy, which is both the biggest market as well as a major source for finance, technology, and ideas (in fact, even government organisations such as Isro are to some extent vulnerable to potential US sanctions against Iran and the same holds for financial institutions). <br /><br /><br />Volatile ties<br /><br />Given the volatile US-Iranian relationship, private companies cannot risk investing in Iran. Post-sanctions, the private sector’s interest in Iran has been limited to purchasing more oil. Otherwise, the private sector has shown interest wherever (and to the extent) the Indian government is itself directly involved such as in the Chabahar port.<br />The Trump administration is pursuing ‘America First’ approach and has not shown willingness to accommodate India’s economic and strategic interests. India needs to find means of independently pursuing its interests in Iran without deferring to the US. I am reminded of a suggestion of Iran’s Ambassador to India Gholamreza Ansari in the context of India’s growing ties with Israel. He said, “If they [Israel] are your friends, don’t let them choose your enemies.” This applies to India’s relationship with the US as well.<br /><br />It needs no emphasising that close and stable political and economic relations with Iran have to be an integral part of any ‘India First’ policy. Iran is one of the biggest suppliers of oil and gas in the world and among the major suppliers located closest to India. Also, Iran shares a direct border with Central Asia that lies on both sides of the Caspian Sea. <br /><br />So, Iran is indispensable not only for India’s energy security, but also for providing resource rich Central Asia with an alternative access to the sea bypassing China, Pakistan, and Russia. Moreover, Iran can reduce Afghanistan’s dependence upon Pakistan by providing it with an alternative access to the sea.<br /><br />The stability of India’s relationship with Iran will depend on the speedy completion of infrastructure projects, a partnership in the new economy, and greater people-to-people contacts. At the moment, the bilateral relationship is standing on just one wobbling leg. Given the understandable reluctance of the private sector to invest in Iran, the onus is on the Indian government to find ways of leveraging the country’s strengths in, say, the new economy to build a strong partnership with Iran. The government also needs to encourage tourism and educational exchanges to promote people-to-people contacts.<br /><br /><em>The writer teaches at Azim Premji University, Bengaluru</em></p>
