Jean-Marc Ferré
World News /14 Jul 2018

India-Iran Ties under the American Shadow

Recently, while addressing an audience in New Delhi, the U.S. permanent representative to the United Nations, Nikki Haley, resorted to a familiar refrain and called Iran a major threat to the U.S. and urged India to rethink its ties with Iran. At the same time, she drew attention to Indo-U.S. friendship and their shared vision for the Indo-Pacific. While India’s bilateral ties with both Iran and the U.S. are marked by substantial interactions, relations between the U.S. and Iran are strained to say the least. The U.S. approach to Iran is affecting India’s relationship with Iran.

India has shared a healthy relationship with Iran. Recently the two parties signed the Tehran Declaration in 2001 which was followed by the establishment of a strategic partnership through the New Delhi Declaration in 2003 to further enhance global and regional cooperation. Iran also controls India’s access to the Chabahar port via Afghanistan.

Since Pakistan did not allow a land access route to Afghanistan, India had to find an alternative way and partnered with Iran by developing the Chabahar port. In addition to this, India is also a part of the ambitious International North-South Corridor (INSTC) project which connects India and Russia, passing by Iran, thereby not only reducing transportation cost and time, but also allowing New Delhi easy access to West Asia. India has recently approved the Customs Convention on International Transport of Goods under the cover of TIR Carnets, which will allow easy access to the Central Asian Republics. However, the rate and growth of investments by India in Iran has been very slow. Moreover, China and Japan are also vying for infrastructure investments in Iran to increase their presence and connectivity to Central Asia.

U.S.- Iran relations are going from bad to worse, especially under the Trump administration after the withdrawal from the Iran nuclear agreement. The United States withdrawal from the deal has created a ripple effect and led to the re-imposition of sanctions.

At the same time, India-U.S. relation has been moving towards a common goal of maintaining free, open and a rule-based Indo-Pacific as a deterrence against China’s rise. Bilateral relations have taken the shape of a global strategic partnership on the shared values of democracy and other common regional, global and multilateral issues. Though both countries are trying to cement their relationship, a cost has to be paid. A clear message was given to India by the U.S. that it should pay attention to its friends and partners as they may affect the future of Indo-U.S. relations, namely India’s relationship with Iran. The U.S. administration warned that oil imports from Iran should be reduced to zero. Though Washington backs India’s investment in the Chabahar port, as it allows India to play an important role in war torn Afghanistan, any trade ties with Iran are not acceptable.

There are also some nuanced differences in the way the Indo-Pacific is defined by Washington and New Delhi. America defines the region as extending from the west Coast of India to the West coast of the U.S., while India defines the geographic scope of the region as extending from the Suez Canal to the Pacific, including the maritime boundary along with the continental core. Thus, accordingly, Iran can be a good partner for India in the Indo-Pacific.

Being close to a great power jeopardizes and puts limitations on other bilateral relations. Iranian media has criticized India as being a ‘pygmy rather than a giant’ by America, thus questioning the integrity of India’s foreign policy decision. Despite India’s public stance that it makes independent decisions pertaining to its ties with Iran, many private companies have reduced their ties with Iran after the imposition of U.S. sanctions. In 2017, oil imports in Iran have dropped from 97,000 bpd to 67,000 bpd. A large number of Indian companies have a share and stake in the U.S. market and are exposed to the U.S. financial system. The Indian Minister of External Affairs, Sushma Swaraj, stated that unilateral U.S. sanctions will not be accepted by India, except those imposed by the United Nations. However, India’s Oil Ministry, is reportedly trying to reduce its imports from Tehran.

Developing tensions between the U.S. and Iran along with the imposition of sanctions will make it difficult for India to practice an independent foreign policy towards Iran. This is one of the instances where America is seen as promoting its strategic interests and casting its shadow, while not aligning and undermining the interests of India, which is not only energy dependent on Iran, but also aims to maintain a healthy and strong bilateral relationship. As of now it will be difficult for India to carry on as usual in dealing with Iran considering Washington’s displeasure with the current situation.

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