India should convince Trump about its relations with Iran
by Ashok B Sharma on 08 Aug 2019 1 Comment

The integration of South Asia remains a distant dream. Pakistan seems to be the only irritant in the way of consolidation in the region. The bitterness between India and Pakistan has stalled the process in the South Asian Association for Regional Cooperation (SAARC). Islamabad has denied India access to another SAARC country, Afghanistan. But Iran which is not a South Asian country has offered New Delhi use of its Chahbahar port for transport of goods to Afghanistan. India has partially developed the port and goods are being transported to Afghanistan. India has already developed a 240-km long road connecting Chahbahar with Afghanistan.


Plans are underway to construct a 900-km Chahbahar-Zahedan-Hajigak railway line that will connect Chahbahar port with the mineral-rich Hajigak region of central Afghanistan. About seven Indian companies have been given permission to extract iron ore in Hajigak region. Besides, earlier talks were scheduled for allowing Indian companies to invest in Chahbahar SEZs, including in smelter plant and urea producing facility. But all these activities have been stalled in the wake of the recent US sanctions against Iran.


New Delhi through Chahbahar port can gain rail and road connectivity, if developed in future, not only to Afghanistan but also to Central Asian countries, West Asia, Turkey and Europe and Eurasia via the proposed multi-modal North-South Corridor and its extensions.


India has been allowed to develop two berths at Chahbahar port. The port is situated in southeastern Iran, an area not as developed as the western part of the country. Tehran needs massive investments to develop Chahbahar port which can serve as a deep sea port. As Bandar Abbas is already congested, Iran wants to shift operations to Chahbahar. It has invited investments from China and Pakistan, who are yet to respond. This is a golden opportunity for India to step up its investments.


In November 2018, the United States had exempted the multinational Chahbahar port project from its sanctions against Iran due to its economic importance to Afghanistan. New Delhi should take up with Donald Trump that its activities in Chahbahar port should not invite US sanctions. Due to sanctions, India has reduced its oil imports from Iran to zero. India gets oil from Iran at cheaper rates.


India has a strategic partnership with US. It should tell Washington that it should see that none of its strategic partners should be in trouble on account of sanctions imposed on Iran. New Delhi should be bold in asserting its stated position that it adheres to sanctions imposed on any country by the United Nations, and not any sanctions imposed by any one country against the other. Tehran has rich deposits of natural gas and both India and Pakistan should revive the proposed Iran-Pakistan-India gas pipeline.


Iraq, which is heavily dependent upon Iranian gas supply, has been granted a waiver by the US.  If Iraq can be granted a waiver, why not India? Iran’s National Oil Company is set to set up an office in Baghdad for cooperation in oil industry and transfer of engineering and technical services to Iraq. Washington’s NATO ally, Turkey, has refused to fall in line with US sanctions and has decided to go ahead with Iranian oil imports and to increase its gas imports from Tehran.

In mid-April this year, Iranian Foreign Minister Javed Zarif visited Turkey where he argued for setting up a financial mechanism similar to the proposed INSTEX – a special purpose vehicle set up by Germany, France and UK to facilitate non-dollar trade with Iran. During Zarif’s visit to India in January 2019, the two countries signed an agreement for rupee-payment mechanism under which IDBI Bank will execute the mechanism and set up Iran trade processing cells in Delhi, Ahmadabad and Kolkata. But this mechanism is yet to be implemented.


The US has exempted from its sanctions Tehran’s supply of natural gas to neighbouring countries. Armenian Prime Minister Nikol Pashinyan pitched his country as transit corridor for Iranian gas in the region. Iran has agreed to step up its gas supply to Armenia and launch tripartite gas cooperation to export gas to Georgia. During Pakistan Prime Minister Imran Khan’s visit to Iran in April 2018, the two countries decided to resume negotiations on the delayed Iran-Pakistan gas pipeline project. India should seize this opportunity for negotiating for extension of this gas pipeline on the lines of the Turkmenistan-Afghanistan-Pakistan-India (TAPI) project.


There are numerous benefits if India maintains good relations with Iran. Connectivity to Afghanistan, Central and Western Asia and Europe, supply of oil and natural gas. Connectivity with Afghanistan through Chahbahar port will foster consolidation of South Asia and its integration with Central Asia. The US has dual policy in Indian Ocean region. On the eastern side of the region, it needs India to counter the rising influence of China in the Indo-Pacific. On the western part of the Indian Ocean region, US seeks the help of China and Pakistan to deal with the Taliban in Afghanistan.


One of the main reasons why Donald Trump wants to undo the nuclear deal with Iran is that this deal was struck by his predecessor Barack Obama. He wants to make a new beginning by striking a deal with North Korea. Also US allies in the region like Israel and Saudi Arabia want to see a weak Iran. India should play its diplomatic card in this situation and convince the mercurial Donald Trump that its relations with Iran should not come under US sanctions.


Connectivity to Afghanistan through Chahbahar will serve the interests of peace and development in Afghanistan. Does the US need India’s help in Afghanistan? It is more interested in seeking help from China and Pakistan to resolve the Taliban issue there. The region is therefore a platform for power play by China and Pakistan. China wants to keep India on tenterhooks by siding with its all-weather friend Pakistan. India has to move carefully. India should offer to mediate between US and Iran, just as Turkey, Iraq and Japan that have made similar offers.     


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