The inception of the foreign relations between India and Iran dates back to the 1950s as both countries recognized each other. This was the era of the Cold War where both countries had distinct worldviews. Iran under Monarchy was an American ally in western Asia while India approached international relations with a non-alignment approach. Though both countries recognized each other, during wars of 1965 and 1971 between India and Pakistan, Monarchical Iran earnestly supported the latter at the angst of the former.
However, it was only in the aftermath of the revolution in Iran under the leadership of Shiite cleric Ayatollah Khomeini, the relations between Iran and India underwent a significant shift. Imbued with a new Shiite political missionary objective, the clerical leadership in Iran in context of consolidating their own rule in Iran along with exporting the revolution in neighboring countries, including Pakistan, opted for an approach which later came to be known as asymmetrical as Iran considered Shiites in Pakistan as its extension of influence and depth in the country.
Subsequently, this overarching Iranian strategy instigated Pakistani protestation over Iranian actions. Episodes like abetting of Shiite militant organizations in Pakistan and waging a sectarian war through its proxies in Pakistan battered the Iran-Pakistan relation. Pakistan’s policy of supporting the Taliban in Afghanistan also contributed towards downgrading of the relations of both the countries. This pushed Iran closer to India.
In Afghanistan, both India and Iran supported the Northern Alliance for their reasons and purposes. This brought Iran and India ever closer to each other. As the Indian economy started to expand, its dependence on Iranian oil increased proportionately. Today, Iran is the second-largest supplier of crude oil to India. In 2002, both countries entered the defense cooperation agreement but the pinnacle moment in the India-Iran relations came when both countries agreed to refurbish Iran’s strategically located Chabahar port.
This development entailed with India investing more than $8 billion in Chabahar Special Economic Zone. The Chabahar port provided India with sea-land connectivity to Afghanistan bypassing the land route through Pakistan. The port also enables India to counter China’s String of Pearls policy. The port sits just 72 kilometers from Pakistan’s Gwadar port, through Chabahar India gets an observational post in the strategically important Strait of Hormuz. It is because of these advantages that India even defied consistent United States pressure and on the face of US sanctions on Iran pursued the development of the port. However, those sanctions slowed the work on the port.
Two recent developments have soured the relations between the two countries. First, Iran has decided to build the Chabahar-Zahidan railway line on its own. Earlier, India was financing the project but due to consistent delays from the Indian side pushed the Iranians to initiate the work on the railway line independently. The Iranian city of Zahedan is located near the Afghan border and the rail route could further help the smooth movement of goods to Afghanistan. Second, China finalized a massive 25-year, $400 billion strategic partnership deal with Iran. The deal includes the building of Bandar-e-Jask port, which is 350 kilometer from Chabahar. The magnitude of the Chinese investments dwarfs the Indian investments in Iran and can seriously harm Indian interests in the region.
These two developments have left many wondering that whether China has pushed Iran away from India and the Indian investments in the region especially Iran have been left fruitless even before they could reap any dividends for the Indians. In short, has India lost Iran?
Before going any further, we must understand the context of these developments to make sense of these developments. It is important to remember here that developments like these are not a sudden phenomenon. Agreements like these require extensive cultivation of goodwill and backdoor negotiations from both sides. So, this was brewing for some time and is not some kneejerk reaction.
The biggest problem that the Iranian revolutionary regime is facing at the moment is the US imposed sanctions. These sanctions have left the Iranian economy in tatters. The Iranian economy is in a state of paralysis due to these sanctions. The reinstatement of US sanctions in 2018 has dried up foreign investment in the country and has also hit Iran’s oil exports. In 2019, the Iranian economy shrank up to 9.5% and the unemployment rate was at 16.8%. Resultantly, the Iranian currency “Rial” also nosedived. Due to inflation, the cost of living has increased. The impacts of these sanctions are not only limited to the economic sector; the Iranian social sector is gravely hurt due to these sanctions.
The Iranian response to the COVID 19 pandemic has further exposed the vulnerabilities of the Iranian health system. These economic and social hardships have taken a great toll on the Iranians and these hardships triggered a nationwide protest last November. The authorities had to use brute force to quash these protests. The US and its allies think that these sanctions are serving their purpose. The agitation on the home turf makes the Iranian leadership anxious and wants quick fixes to show something to their domestic audience.
The international power structure is in the process of a change. China is emerging as one of the new world power. In line with its new role in the international power system, China is expanding its reach and clout. In Iran, China founds an able and willing ally; an ally that is both geostrategically important and in need of a partner.
It is important to mention here that China is still the biggest buyer of Iranian oil and with a limited market for its commodity of oil, Iran would like to maximize its state coffers in partnership with Beijing. Moreover, the renewed Cold-war style confrontation between China and the US is also leading Iranian leadership to embrace China for its commercial and strategic benefits.
All this brings us to the real question that is India losing Iran? The answer to this question is a simple “no”. The fact of the matter is that international relations do not run based on ethics and morality, it is dictated by national interests. As Lord Palmerston told the British House of Commons “We have no eternal allies and we do not have perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow”.
Currently, the interests of both India and Iran converge with each other. India needs Iran because it provides it access to Afghanistan bypassing the land route through Pakistan and Iranian oil to sustain its economic growth. Iran needs India because it is a buyer of its oil in an already squeezed market for Iranian oil and is ready to invest in Iranian infrastructure irrespective of the global pressure. Thus, these two developments can be two bumps that came along the way but they surely are not the end of the road.
Muhammad Aizzan Malik is a visiting faculty and MPhil scholar in the political science department at Government College University, Lahore. His interests are contemporary affairs, global politics, and history.