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Prime Minister Narendra Modi welcomed Iran as the newest member of the Shanghai Cooperation Organisation (SCO) at the virtual summit of the grouping on Tuesday (July 4).
Prior to Iran’s joining, the SCO consisted of eight member countries: China, Russia, India, Pakistan, and the four Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.
The grouping came into existence in Shanghai in 2001 with six members, minus India and Pakistan. Its primary objective was to enhance regional cooperation for efforts to curb terrorism, separatism, and extremism in the Central Asian region.
Afghanistan, Belarus, Iran, and Mongolia enjoy Observer status in the SCO, while six other countries — Azerbaijan, Armenia, Cambodia, Nepal, Turkey and Sri Lanka — have Dialogue Partner status.
The case for Iran’s full membership of the SCO has been made for several years.
In 2016, the year after Iran signed the nuclear deal (called JCPOA) with Western powers led by the United States, Russia’s President Vladimir Putin said, “We believe that after Iran’s nuclear problem was solved and United Nations sanctions lifted, there have been no obstacles left [for Iran’s membership in the SCO].”
However, the US under President Donald Trump pulled out of the deal in 2018, and the agreement became ineffective. A year later, the US ended all waivers, curbing Iran’s oil exports.
Changing geopolitical landscape
There have been major changes in the geopolitical landscape of late.
The chaotic exit of the US from Afghanistan has opened up space for Chinese influence and investments in the Central Asian region. China has drawn Pakistan more tightly in its strategic embrace, and grown ever more assertive on the global stage.
As the war in Ukraine has raged on, and the West’s relations with Russia have plummeted to their worst-ever levels, Beijing has declared a “no-limits” friendship with Moscow.
Iran has reached out beyond traditional ally Russia. In March this year, it signed a China-brokered deal to re-establish diplomatic relations with its old regional rival, Saudi Arabia. A border market was opened at Iran’s border with Pakistan in 2023, despite the fact that they have not shared close ties over the years.
For China, having Iran, with its abundant energy supplies, in the SCO is reassuring as it escalates the tussle with the US. In 2021, China and Iran signed a 25-year deal for cooperation in areas including oil. A Bloomberg report this year noted that private refiners in China, the world’s largest importer of crude, are now buying more Iranian oil as competition for supplies from Russia rises in Asia.
Russia has every reason to have more allies on the platform. Belarus, Russia’s close regional ally, is likely to sign a memorandum of obligations, which will subsequently lead to full membership.
Tightrope walk for India
India faces the task of maintaining a delicate balance as the dynamics of the SCO change.
India and the US have elevated their partnership to unprecedented levels of cooperation and trust, and Prime Minister Narendra Modi has recently returned from an Official State Visit to the US during which the two countries signed important technology and defence agreements.
US President Joe Biden has emphasised the democratic credentials of the two countries, and placed these in opposition to Chinese authoritarianism.
India has also had historical ties with Iran. Commercial ties between India and Iran have been traditionally dominated by Indian imports of Iranian crude oil. Iran was among India’s top energy suppliers until May 2019. Following the end of the US waiver on sanctions on May 2, 2019, India suspended the import of crude from Iran.
