Some important information about India Iran Relations is :-
Why in news?
President of Iran, Hassan Rouhani recently visited India.
More about the visit
- India and Iran have signed nine agreements which included areas like strategic Chabahar port,Avoidance of Double Taxation, Extradition Treaty, Cooperation in the field of Traditional Systems of Medicine, Agriculture and Allied Sectors.
Significance of India Iran relations
- Energy security- Iran is the third largest supplier of crude to India. It has also the world’s second-largest reserves of natural gas which could be well leveraged by India.
- Connectivity- The Chabahar port allows India to strategically bypass Pakistan and reach land-locked Afghanistan and Central Asian countries. India views it as a strategic response to China’s development of Gwadar port in Pakistan and its aggressive pursuit of Belt and Road Initiative.
- India is currently involved in constructing a 560 mile long railway line linking the Iranian port with the Hajigak in southern Afghanistan which is close to Zaranj-Delaram Highway.
- Iran is the key link to provide connectivity to Central Asia and Europe, via the International North South Transport Corridor (INSTC).
- Trade and investment- India will set up plants in sectors such as fertilizers, petrochemicals and metallurgy in Chabahar Free Trade Zone (FTZ). This will promote India’s energy security while providing financial
resources and employment opportunities to Iran.
- Discussions on the exploitation of Farzad B gas field are underway.
- India has been actively pursuing the Iran–Pakistan–India (IPI) gas pipeline project.
- Iran is a big market for India for India’s agro-products, software services, automobiles, petrochemical products among others, here the scale could be substantially increased. Crucially, Tehran has consistently offered New Delhi very favourable terms, including non-dollar oil sales.
- Geopolitical- Iran is a major player in securing stability in the overall West Asian region, especially with respect to India to maintain a balance between Shia-Sunni conflict and Arab-Israel conflict.
- Securing sea lanes of communication (SLoC), combating piracy in the Indian Ocean region. India aspires to become a net security provider in the Indian Ocean region where Iran is a major stake holder. Iran is also important in countering the string of pearls expansion of China in the Indian Ocean.
- Terrorism: Iran is an important player in fighting global terror groups such as Al-queda, ISIS, Taliban among others. Tackling Cyber terrorism is also very important where both the country could collaborate. Moreover Iran can also play a major role in dealing with other organized crimes such as drug trafficking, arms dealing etc.
- Political turmoil- The present government in Iran is under considerable pressure both on the domestic front, in political as well economic areas, and in the realm of Iran’s international ties.
- Uncertainty over the nuclear deal- The uncertainty over the fate of the nuclear deal Tehran signed with the West in 2015 poses a big challenge to Indian foreign policy. Experts warn that a US exit from the deal would affect India’s planned investments in Iran.
- Bilateral trade- On bilateral trade the biggest stumbling block is banking channels. The two sides are now discussing the possibility of alternate payment mechanism, in addition to the current channel through UCO Bank for rupee payments.
- Indian exports to Iran have steadily declined from $4.9 billion in 2013-14 to $2.379 billion in 2016-17, increasing the trade deficit.
- The Farzad-B gas and oil fields- Another issue is the pending negotiations over the Farzad-B gas and oil fields that India has expressed its interest in.
- India-relation with Israel & USA – Israel, one of the closest US allies in the region, has also been vocal against the nuclear deal, and considers Iran its biggest security threat. India’s relationship with the United States, and American concerns about Iran have also affected the India-Iran relationship.
- India relation with Gulf countries- Iran’s relations with Saudi Arabia remain tense. India has reinforced its historical ties with countries on both sides of the Gulf. This may come out to be an issue.
- Kashmir Issue- Iran’s supreme leader Ayatollah Khamenei equated the on-going Kashmir conflict with that of Yemen and Bahrain has also created suspicion on India.
There are a large number of areas in which the interests of India and Iran coincide like connectivity, energy, infrastructure, trade, investment, security, defense, culture, people-to-people contacts among others both the countries should leverage their strengths to build a robust and mutually beneficial relationship.