By Talmiz Ahmad
May 20, 2016
Prime Minister Narendra Modi has confounded many observers with the regularity and intensity of his interaction with Gulf countries. After substantial engagements with the UAE, Mr Modi went to Riyadh in April this year: both visits led to a palpable enhancement of political and economic links with these major Arab nations, and the promise that these ties will be imbued with a substantial strategic dimension on the basis of increased security and defence cooperation.
The visit to Iran early next week significantly broadens India’s strategic outreach to this region, which is of utmost importance for our long-term interests.
With Iran having the world’s fourth-largest oil reserves and second largest gas reserves, after the easing of sanctions, India and Iran are well placed to expand energy ties. Before the sanctions, Iran was the number two oil supplier to India, meeting nearly 11 per cent of India’s imports; and it is poised now to regain its earlier status.
In return, it is expected to provide India with major projects in the hydrocarbon sector, particularly the development of the Farzad-B gas field, show some progress on the Iran-Oman-India sub-sea gas pipeline proposal, and possibly agree to Indian participation in refinery and petrochemical projects in Iran.
However, the importance of the visit goes well beyond energy interests: Iran’s crucial importance for India lies in its location as the gateway to Afghanistan, Central Asia and beyond to Russia and Europe through trade and transit corridors. The port of Chabahar on the Gulf of Oman, 300 km from the Strait of Hormuz, 150 km from the Pakistani port of Gwadar, and the nearest Iranian port to India, occupies a central place in these regional connectivities.
Already developed as a deep-water port and industrial zone by Iran, India is committed to further development of this port in two phases: first, with an investment of $85 million, a container terminal and a multi-purpose cargo terminal will be developed. In the next phase, with a further investment of $110 million, a 900-km railway line will be built to go from Chabahar to the iron ore mines of Hajigak in Afghanistan, moving in parallel with the Zaranj-Delaram highway that India has already built.
Iranian President Hassan Rouhani has said Chabahar has the potential of “connecting the entire region”. This will be achieved through a road network that will go from Chabahar through northern Afghanistan, from Herat to Mazar-e-Sharif, and thence across all the Central Asian republics, ending at Almaty in Kazakhstan. When this is completed, it will be the shortest and safest route to Central Asia.
Complementing this route is the North-South Transit Corridor that goes from the Iranian port of Bandar Abbas westwards to Astana, Baku and, across the Caspian Sea, to Astrakhan to link up with Russian road networks. Agreements to realise the plans for Chabahar and the regional links will be the high point of Mr Modi’s visit.
Thus, unlike the Arab Gulf states, which are crucial for India’s energy and economic interests, the importance of Iran lies in the capacity to dramatically extend India’s energy, economic and strategic space into areas that are otherwise just not accessible through land routes.
In realising these potentialities, India faces two challenges: first, in developing its ties with Iran, India may find that China is a major competitor for Iran’s attention. Second, India is building up its strategic ties with Iran in an environment when its important Arab partners are actively hostile to the Islamic Republic.
Some Iranian commentators have warned our think tanks that in shaping its ties with Iran, India should take into account the “long term” scenario in which Iran would partner China and Russia against a US-led Western alliance, and decide which partnership would best suit its interests. This perspective is simplistic in that it envisages a repeat of the Cold War scenario, with China now firmly in the Russian camp. The global situation is likely to be much more complex, with countries pursuing a variety of affiliations in response to specific concerns and challenges. Affirming this is the fact that Japan is expected to partner India in developing Chabahar port through loans and investments.
Some Indian observers have raised the possibility of India’s connectivity projects competing with or somehow challenging China’s One Belt-One Road (OBOR) project that is meant to link China with Eurasia through land and sea connectivities, particularly since Iran has expressed support for it.
This concern is also misplaced. First, OBOR is not just a Chinese project: it cannot be realised without the active political, technological and financial support of all the countries involved; hence, it is truly an Asian project.
Second, the connectivities envisaged by us in association with Iran, in fact, complement OBOR, and by linking our projects with OBOR we will obtain the connectivities on the ground that we so urgently seek.
In fact, the real challenge for India lies in its ability to realise its projects with the same alacrity with which China completed its “Silk Road Train” from Yiwu to Tehran, covering a distance of about 10,500 km.
The contentions between Iran and the Arab sheikhdoms pose a far greater challenge, because the continued conflict and proxy war between the Islamic giants could easily deteriorate into an all-out conflict, with horrific consequences for India, the region and the rest of Asia.
India should give up its traditional posture of non-involvement in contentions issues outside South Asia and lead a diplomatic effort to address the mutual grievances and loss of trust between Saudi Arabia and the Islamic Republic.
In Iran, Mr Modi should build on the extraordinary goodwill and respect that India and its leaders enjoy in the region, and discuss how confidence and trust can be brought back in the dealings of the Gulf nations with each other. He will find that he has a receptive audience.
Talmiz Ahmad is a former diplomat who has served as India’s ambassador in several Middle East capitals