Iranian FM travels to India to upgrade ties

Al-Monitor – Iran’s Foreign Minister Hossein Amir-Abdollahian visited New Delhi June 8-10, where he met with his Indian counterpart Subrahmanyam Jaishankar, Prime Minister Narendra Modi and national security advisor Ajit Kumar Doval. Considering that discussions were held at the highest level, it seemed like an effort to reset India-Iran ties.

Trying to put together a more broad-spectrum partnership, Amir-Abdollahian spoke about drawing up “a road map for long-term cooperation between the two countries.” Mulling over a slew of key issues like energy trade, promoting Chabahar port and extending regional connectivity, Modi expressed hope for an upgrade in bilateral ties.

Evaluating the status of India-Iran ties, a European diplomat posted in Islamabad told Al-Monitor, “Amir-Abdollahian’s New Delhi visit should be seen in the context of broader developments potentially affecting the relationship between the two countries.”

Speaking on condition of anonymity, he said,” Despite ups and downs in past years on issues like Chabahar, the railway line connecting it to Zahedan in Iran’s Sistan-Baluchistan province, Farzad-B gas field and India’s import of Iranian oil — mostly due to external variables [US sanctions against Iran] — Tehran and New Delhi realize there still are some areas to work on.”

Mainly, cooperation was sought in these sectors.

First, as negotiations to revive the Joint Comprehensive Plan of Action (JCPOA) deal have yielded no result, Tehran has started working on backup plans for continuing trade under sanctions. According to reports, discussions between Amir-Abdollahian and the Indian top hierarchy have focused on energy, with “special heed” paid to the capacities in oil, petroleum and gas that exists within Iran.

Iran used to fulfill 10% of India’s oil requirements, but since May 2019 New Delhi has stopped all its oil imports from there due to US sanctions. However, New Delhi is now importing oil and weapons from Russia, even though Moscow has also been hit by sanctions after its invasion of Ukraine. Consequently, Iran could also request India to buy its crude oil the same way it is importing from Russia.

The diplomat noted, “As Tehran realizes that the revival of the JCPOA will be difficult — if not impossible — to achieve and US sanctions will not only remain but possibly expanded, it looks with interest toward Indian ‘strategic autonomy’ as it keeps importing oil from Russia despite the sanctions imposed on it. From Iran’s side, there is hope that a potential change in India’s approach vis-a-vis US sanctions — by resuming import of Iranian oil — would encourage other countries to follow the same path.”

Not very optimistic about the resumption of oil trade with New Delhi, Ashok Swain, professor of peace and conflict research at Uppsala University in Sweden, told Al-Monitor, “India is very much interested in buying cheap oil from Iran, but that looks very unlikely due to continuing sanctions on Iran. The United States and Iran have failed to renegotiate the nuclear deal, and there is every sign that Iran’s relations with the United States will worsen. Iran’s strengthening of relations with China and Russia also puts it in another camp when India is trying its best to align with the United States security-wise.”

Second, since trade with Iran would mean circumventing the US sanctions, the two sides explored recognized legal ways and means to avoid the Swift banking system, such as barter trade or settling trade transactions in the Indian rupee. For this, a new banking mechanism would be devised and Tehran has already implemented similar measures with almost a dozen countries.

At a World Trade Center event, Amir-Abdollahian said, “Yesterday, we discussed with Indian high-level officials a special need with my colleague the external (affairs) minister on the need to establish a banking mechanism. … There are ‘ample opportunities’ for India and Iran irrespective of the ‘unilateral sanctions’ by the United States, which will not last long.”

Third, fresh opportunities for Iran-India-Afghanistan collaboration have emerged. When the Taliban came into power in August 2021, the Indian Embassy in Kabul had closed, as New Delhi sided with the outgoing Karzai administration. However, an Indian delegation visited Kabul last month and the resumption of stalled infrastructure projects and reactivation of diplomatic ties seems possible now.  

Assessing this development, the diplomat said, “Afghanistan, Tehran and New Delhi now have an opportunity of convergence after the recent contacts between India’s officials and the Taliban, as New Delhi sees Iran as a viable route to Afghanistan. In the medium term, Iran will continue to support a regional approach vis-a-vis the Taliban, as there are some issues to be clarified with them, starting with the perceived “lack of inclusivity” of the current set-up in Kabul.”

Since 2016, a trilateral agreement has existed between Tehran, Kabul and New Delhi, and head of Iran’s railways held a meeting recently with the head of Afghan’s railways to discuss the relaunch of the Khaf-Herat route.

Finally, Iran and India reaffirmed their commitment to develop Chabahar port as a regional transit hub. Though the port was spared by US sanctions, India could not complete construction on time and highlighting the “sluggish” pace of work there, Amir-Abdollahian observed that the port has immense potential for expanding trade and economic ties.

In response, Jaishankar said that joint efforts would be required to expand a few more transit routes and regional corridors. Both sides decided that there was a need to “precipitate” investment in Chabahar. If the International North-South Transport Corridor (INSTC) connecting India, Iran, Afghanistan and Russia to Central Asia is fully launched, it provides New Delhi with an alternate route as it cannot cross Pakistan by land.

Nevertheless, the diplomat added, “The INSTC’s full potential will be realized only if sanctions get lifted and Chabahar port becomes a strategic gain for India due to Chinese investments in Gwadar. However, Tehran has repeatedly avoided giving any strategic dimension to Chabahar, stating its willingness to open the door for its future development to other countries as well, including China and Pakistan.”

Not very hopeful about Chabahar’s progress either, Swain noted, “The continuation of the sanctions regime on Iran also takes away any hope of reviving the Chabahar port project. Overall, the visit of the Iranian foreign minister to New Delhi will not bring any miracles and improve India-Iran relations. On the other hand, global power politics will most likely put the relations between these two countries to a severe test.”

This month, Iran’s state-run shipping company started its first transfer of Russian goods to India, using this trade corridor.

Dwelling on divergences between the two countries, he concluded, “India has been for some time trying to maintain a balance between its relations with Israel and Iran. The visit of Iran’s foreign minister to India took place only a week after the visit of the Israeli defense minister. However, the India-Iran relationship is facing multiple challenges, and there is very little hope of any improvement in the near future.”