Reports that Iran and China are close to concluding a 25-year strategic partnership — which may involve a trade and investment partnership totalling a massive $400 billion — have generated considerable angst in India. This is being linked to reports that Iran has decided to undertake the construction of the Chabahar-Zahedan railway line to the border with Afghanistan on its own because India continues to delay its implementation of the project.
However, says Shyam Saran, a former Foreign Secretary and a Senior Fellow at CPR, it is not just India but also other countries, including China, which have found it difficult to undertake projects in Iran because of US sanctions, particularly the denial of dollar financing.
That’s why Saran believes the 25-year strategic partnership plan should also be taken with a generous pinch of salt. “Though made much of by Iran, it has not been confirmed by China”. Saran says these reports are being encouraged by Iran to suggest that it has powerful friends and that the US has been unable to isolate it.
China attaches importance to its relations with Iran, which is a key source of energy supplies, a significant component of its ambitious Belt and Road Initiative, and a potentially lucrative market for its project exports and manufactures. However, like India, it has also in parallel cultivated closer relations with Saudi Arabia and the UAE, which are currently bigger suppliers of oil and gas to China than Iran is.
With the US becoming self-sufficient in oil and gas and its reliability as an ally being increasingly in doubt, the Gulf countries have welcomed China as the world’s largest oil importer, a source of military supplies and as an emerging security partner.
That is why Saran writes: “While acknowledging this changed regional geopolitical landscape, India should pursue its largely successful policy of maintaining positive relations with Iran, the Arab states and Israel, just as China has done and not use a Chinese prism through which to shape its policy”.
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