Four days after international sanctions on Iran were lifted on January 16, Tehran’s envoy in New Delhi spoke his mind at Delhi’s India International Centre.
“In my three years as the Ambassador of Iran, I have often been advised to be patient on big India-Iran projects. Does India want to wait for centuries before capturing the right opportunities?” Gholamreza Ansari told an audience of retired Indian diplomats and officials, knowing full well that word would travel to South Block.
It was the classic Iranian response — part complaint, part negotiation — after having felt let down by India during the period when sanctions were in force, and oil imports from Iran had dropped significantly. Publicly, Iran refrained from criticising India; privately, its officials complained that India, which keeps talking of “historic and civilisational” links between the countries, had not stood by them.
While agricultural and pharmaceutical products were outside the ambit of the sanctions, and wheat was imported from the US even then, Tehran once made an SOS call to Delhi for cheaper cancer drugs. India sent delegations from pharma companies, but dithered — and Iran was left looking for other options.
Since the lifting of sanctions, things have changed significantly for Iran. Almost every week for the last four months, a delegation from the US, Europe, China, South Korea or elsewhere has visited, ready to do business with it.
Meena Singh Roy of the Institute for Defence Studies and Analyses, who has been travelling to Iran regularly since 2006, said the country had “immense appetite” for investments. “For them, economy is the top priority”, Roy, who met Iranian officials and academics in Tehran in March, said.
As Prime Minister Narendra Modi travels to Iran on Sunday, New Delhi will be looking at Tehran as a strategic economic partner with whom it can work out tax and investment agreements. For Iran, the new phase of the relationship will rest on the four pillars of security, economy, energy and infrastructure.
Among the infrastructure projects on India’s mind, the Chabahar port, International North-South Transport Corridor (INSTC), and Trilateral Cooperation with Iran and Afghanistan are towards the top.
The Chabahar port is crucial to enhance connectivity with Afghanistan and Central Asia. During External Affairs Minister Sushma Swaraj’s visit to Iran last month, the two sides agreed that the contract and modalities for a $ 150 million credit for the port would be signed soon. The Centre has also approved a $ 400 million line of credit for the supply of steel rails from India, and IRCON officials are expected to visit Iran for discussions on the Chabahar-Zahedan railway link.
The text of the Trilateral Agreement among India, Afghanistan and Iran on Transport and Transit Corridors (Chabahar Agreement) was finalised during the second meeting of experts in Delhi on April 11, 2016. The Agreement will facilitate better connectivity among the South, Central and West Asian regions, and will significantly improve India’s connectivity with Afghanistan and Central Asia.
Iran has supported India’s inclusion in the Ashgabat Agreement, of which Turkmenistan, Iran, Oman and Uzbekistan are founding members. It came into force on April 23, 2016, and is an important corridor connecting Central Asia with the Persian Gulf. “The hope is that some of these connectivity projects would get finalised during Modi’s visit,” Roy, who has been interacting with officials from both New Delhi and Tehran, said.
On the energy front, India is looking at concluding the Farzad-B gas field agreement. Delhi has already conveyed that Indian firms are willing to invest up to $ 20 billion in Iran’s energy sector, and are also interested in setting up petrochemical and fertiliser plants, including in the Chabahar SEZ, either through a joint venture between Indian and Iranian public sector companies, or with private sector partners.
Iranian officials have told the Indians that the Farzad-B gas field would be kept outside the tendering process, and India would be given an opportunity to make a lucrative offer.
While Ambassador Ansari recently said that the much-delayed Iran-Pakistan-India pipeline is best forgotten, a series of other pipelines — the Iran-Oman-India undersea pipeline and the Turkmenistan-Iran-India pipeline among them — still hold promise.
Sanjay Singh, who has served as India’s ambassador to Iran, said: “We know each other very well. They are like us… equally difficult. Ask anyone who wants to do business with us.” The two countries need each other, and can work on “mutually beneficial” projects, Singh said. As one of the four biggest importers of Iranian oil — along with China, Japan and South Korea — New Delhi’s place in Tehran’s scheme of things is well settled, he reasoned.
While Iran’s position vis-à-vis Saudi Arabia and Israel will always shape India’s tightrope walk in a region that is rife with sectarian sensitivities and home to a huge Indian diaspora, they are, “strategically speaking, key, because they are your neighbour’s neighbour”, Singh said.
Modi’s visit, which takes place almost four years after Prime Minister Manmohan Singh went to Tehran for the NAM Summit in 2012, will be key in charting the “new chapter” in the relationship. It is to be hoped that India would not want to wait “centuries”, as Ambassador Ansari put it, before capturing the right opportunities in Iran.