India-Iran Relations

The relationship between the Republic of India and the Islamic Republic of Iran is referred to as India–Iran relations. On March 15, 1950, independent India and Iran established diplomatic relations. For much of the Cold War, relations between India and the former Imperial State of Iran deteriorated due to diverging political interests: India supported a non-aligned stance while maintaining close ties with the Soviet Union, whereas Iran was an open member of the Western Bloc and maintained close ties with the US.

When India did not support the 1979 Islamic Revolution, the two countries’ relationship improved briefly in the end. Nonetheless, Iran’s continued support for Pakistan in the India–Pakistan conflict, as well as India’s close relations with Iraq during the Iran–Iraq War, significantly strained bilateral ties.

Both India and Iran supported the Northern Alliance against the Taliban in Afghanistan during the 1990s, and both received open Pakistani support and ruled the majority of the country until the US-led invasion in 2001. They continued to collaborate to support the broad-based anti-Taliban government led by Ashraf Ghani and supported by the international community until the Taliban reestablished the Islamic Emirate of Afghanistan in Kabul in 2021. India and Iran signed a defence treaty in December 2002.

In terms of economics, Iran is India’s second-largest crude oil supplier, supplying more than 425,000 barrels per day; as a result, India is one of the largest foreign investors in Iran’s oil and gas industry. Due to extensive economic sanctions against Iran, the annual oil trade between India and Iran was halted in 2011, forcing the Indian oil ministry to pay off debt through a banking system via Turkey.

India and Iran have significant geopolitical differences on key foreign policy issues, despite some widely accepted core interests. While both countries remain opposed to the Taliban, India, unlike Iran, has supported NATO-led forces in Afghanistan.

According to a BBC World Service poll conducted at the end of 2005, 71 percent of Iranians regarded India’s effective feedback positively, with 21 percent viewing it negatively, giving India the most favourable rating of any country in the world.

Highlights

1. From ancient times with the invasion of the Parthians to modern times, both India and Iran have been evolved through mutual interactions with one another.
2. Until 1947, the two nations even shared a land boundary before the partition of India took place.
3. In recent times, during the tenure of Shah Reza Pahlavi till 1979, relations between India and Iran remained lukewarm. Both countries were on opposing sides of the cold war.India chose to maintain a policy of non-alignment and Iran chose to embrace the US.
4. This even meant that Iran grew closer to Pakistan, a US ally, and allowed it to use its territory against India during the 1971 war.
5. It was after the overthrow of the monarchy by an Islamic Revolution in 1979 led by Ayatollah Khomeini that the relations between the two countries started to improve.
6. In 1980, a Joint Commission was appointed to steer the relations between the two countries towards a greater path.
7. In 2001 and 2003, the Tehran and New Delhi declarations were signed to enhance the strategic partnership between the two nations. However, little could transpire after that. Following the negotiations over the Indo-US Nuclear Deal, Because of American sanctions and restrictions , India’s relation with Iran has been on bitter terms.

Pillars of cooperation:

Economic links and development assistance:

1. In 2018-2019, India imported crude oil worth US$ 12.11 Billion. This is due to the ‘Significant Reductions Exceptions’ waiver from the US coming to an end. Under ‘Significant Reductions Exceptions’ the USA permitted India and a few other nations to continue importing crude oil from Iran, without any sanctions.
2. Despite all these sanctions, to get around the US sanctions, the Reserve Bank of India and the Iranian Central Bank signed a ‘Currency Swap Agreement’ which permits India to pay for the oil imports from Iran using the Indian Rupee (INR). This would save India its precious foreign exchange reserves.

Connectivity Projects:

International transport and transit corridor project: This project initially conceived in 2003 was finally agreed to in 2016. Iranian President Hassan Rouhani, Prime Minister Narendra Modi, and Ashraf Ghani, the Afghan President signed the ‘International Transport and Transit Corridor Agreement’ in 2016 in the Iranian capital of Tehran.

Strategic/Defence Relations:

1. On the issue of Pakistan state-sponsored terrorism, both India and Iran are victims of these dastardly attacks that have destroyed the people and their lives.
2. Sunni insurgent groups from Pakistan have targeted Iran in the past. This is one area where further collaboration should be explored.
3. Iran’s hostile attitude towards the members of the Gulf Cooperation Council and Israel has harmed India’s interests and India has not supported Iran in this regard.
4. China has also evinced interest to connect the Gwadar port to the Chabahar port. The distance between the two ports is barely 75 Km.

The road ahead:

1. India-Iran relations can be compared to the vagaries of the monsoon. A good monsoon guarantees a good year of economic development in India. In the same, a friendly administration in the USA guarantees the opportunities for the expansion of Indo-Iranian ties.
2. The Iranian media has rightly asked as to whether India’s ‘Iran policy’ has been hijacked by the US. As a leading power, India cannot buckle under the pressure of any country and India must take bold steps.
3. Iran is critical to India’s achievement of a developed nation status. In the same way, India is important for Iran’s economic development.
4. As India assumes the non-permanent membership of the United Nations Security Council (UNSC) beginning from January 2021 and as it aspires for a permanent membership at the top UN body, it needs to become more assertive. Perhaps, its relations with Iran can be a good starting point.

Conclusion

India has committed USD 20 billion to oil and gas, petrochemical, and fertiliser projects in Iran. PM Modi visited Iran in May 2016, where he signed the historic Chabahar port agreement.

It is a ten-year contract for the development and operation of a port with two terminals and five berths. A Memorandum of Understanding was signed on the provision of services by Indian Railways, which included the financing of $1.6 billion for the Chabahar-Zahedan railway line.

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