Iran-India Relations: Diverging Allies

Iran-India Relations: Diverging Allies
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In November, Iranian Foreign Minister Javad Zarif, while applauding the bonds between India and Iran, expressed his displeasure to Indian journalists in Tehran over India’s decision to succumb to US pressure and stop purchasing Iranian oil after May 2019. The Indian move had followed the “far-reaching sanctions” imposed by the US against Iran. Moreover, Zarif voiced his concern regarding the dilatory construction of the strategically-located Chabahar Port.
Iran-India relations, particularly their bilateral interactions, have always drawn attractive headlines, although their meetings fail to yield substantial outcomes. After the Iranian Revolution in 1979, and later following the dissolution of the Soviet Union, Indian and Iranian interests merged in several areas such as energy, Afghanistan and Central Asia, defence, and counter-terrorism. The convergence, however, appears to be wavering as regional and global politics are rapidly changing. Iran’s expectation of India to withstand US pressure has not been fulfilled. Consequently, Iran reciprocated by cutting rice import from India.

The US factor: Sanctions, waiver, and pressure

Iran, a founding member of the Organization of Petroleum Exporting Countries (OPEC), was exporting nearly 3 million bpd of oil during the pre-sanctions period. Now, due to a new round of US sanctions, this figure has dwindled to around 1.25 million bpd since the start of 2019. Before sanctions, Iran was India’s third-largest source of hydrocarbon imports. Nevertheless, India reduced its energy import from Iran to 300,000 bpd and as the Iran waiver expired in early May, India had to completely stop purchasing Iranian oil.

However, the US exempted Indian investment in developing Iran’s Chabahar Port from sanctions. Similarly, India’s participation in the construction of a railway line from the Iranian port city to the Afghanistan border was also kept out of the sanctions’ conditions. Yet, Iran was perturbed by India buckling under US pressure on oil purchase. Furthermore, Iran harbors resentment against India on the latter’s positions in the International Atomic Energy Agency (IAEA) and the United Nations on issues concerning Iran and its role in developing nuclear energy and interfering in conflicts in the Middle East.

Delayed execution of mega projects

The Chabahar Port project was portrayed as a symbol of India’s increasing strategic position in its relations with Iran as it was touted to be India’s gateway to Afghanistan and Central Asia. Although employing its full potential is contingent on an external factor, the US designed endgame in Afghanistan. India has pledged $500 million for the project and has reportedly already flowed around $85 million to build fundamental infrastructure. However, issues like terms of agreement, financing, and delegation of powers continue to crop up between the two countries and encumber the project; it occasionally budges but at a snail’s pace. Chabahar is at least a decade behind the Chinese-developed and managed Gwadar Port in Pakistan. Moreover, countries like Saudi Arabia, the UAE, Malaysia, and Turkey have already started planning or executing their partnership projects for Gwadar.

The same applies to the International North-South Transport Corridor (INSTC) and the Chabahar Integration project. The INSTC is the shortest multi-modal transportation network (ship, rail, and road route) linking the Indian Ocean and the Persian Gulf via Iran to Russia and Europe. However, the INSTC requires adequate funding to develop the vast infrastructure and international mechanism to handle operational issues.

Rising sway of Saudi-UAE axis in India

India’s relations with major Gulf players have remarkably improved over the last decade or so. The Saudis and Emiratis have deep foreign reserves and sovereign wealth funds to invest in India’s petrochemical complexes and other mega infrastructure projects. On the other hand, Iran lacks similar cash liquidity and, therefore, cannot offer India better investment opportunities than those provided by Saudi Arabia and the UAE. Iran has been attentively observing the recent development in India-Saudi relations, fearing it could advance at the cost of India-Iran relations. The visit of Indian Prime Minister Narendra Modi to Saudi Arabia has further expanded the common ground for India-Saudi relations.

Though most of the OIC member countries maintain cordial relations with India, in 1994, at the UN human rights council, Iran exhibited exceptional support for India in its dispute with Pakistan over Jammu and Kashmir during a crucial vote on India’s human rights record in the strife-torn state. The move against India was initiated by Pakistan through the support of members of the OIC and some European countries. However, Iran eradicated it by blocking the OIC consensus on the issue – a determining condition to pass the motion. As a result, Pakistan has been unsuccessful in mobilizing international support to manage such a move. Later, in 2005 and 2009, when India voted against Iran at the IAEA on its nuclear program, it felt betrayed. Now, as India is veering towards Iran’s adversary Saudi Arabia, Iran again feels dismayed and isolated. Tehran is also disquieted about the burgeoning India-Israel relations and fears that India is shifting its focus away from Iran and joining the axis with the US, Israel, and Arab states.

Revocation of Article 370 and India-Iran’s balancing act

The Indian government’s decision to revoke Article 370 of the Indian Constitution, thereby ending special legal autonomy for Jammu and Kashmir, which had been appointed for over 70 years, has left Tehran in a predicament. Unlike Turkey and Malaysia, who have taken a strong pro-Pakistan stance both in the UN General Assembly session and afterward, Iran had a more vigilant approach to preventing Article 370’s revocation and desisted to mention its intention through the UNSC resolutions to prevent hindering its relations with India. Moreover, India reacted sharply to Turkey and Malaysia’s statements but weighed its words when it came to denouncing Iran.

However, Iran’s clerical leadership believes that the plight of Kashmir cannot be neglected if Iran wishes to retain credibility and relevance within the global Islamic Ummah (nation) discourse. Iran’s clerical leadership condemned India’s decision to abrogate Article 370. Besides, the Iranian Parliament passed a resolution defending Kashmir and this has created some disturbance in the Indian foreign policy community. Saudi and the UAE opted to remain taciturn or took a stand in favor of India. The Saudis stated that the problem is an internal Indian issue and the UAE ambassador to India remarked that the changes will improve social justice and security and will enhance stability and peace in Kashmir.


India has been maintaining a balancing act in its Middle East policy and regards both Iran and Saudi Arabia as partners with equipollent importance. Currently, there is a realization in India that the prolonged confrontational relations between Iran and its neighbours are indeed damaging to India’s relations with the Gulf region. Therefore, Iran-India relations over the last four decades could not attain the maturity they should have. Moreover, both countries often partake in counter-balancing maneuvers. Iran has recently accepted Pakistan’s mediation effort to bring Iran and Saudi Arabia to the dialogue table and is increasing military ties with Pakistan, which may further widen the gap between India and Iran. Despite strong India-Iran relations in the post-revolution period, the two countries appear to be diverging.

Disclaimer: The viewpoints expressed by the authors do not necessarily reflect the opinions, viewpoints and editorial policies of IRAM.