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A port of call

WITH the Budget session of Parliament and the crucial state elections having concluded, the Modi government has resumed high level diplomatic activity.

A port of call

Balancing act: India should determine how Iran would deal with China vis-a-vis India.



KC Singh

WITH the Budget session of Parliament and the crucial state elections having concluded, the Modi government has resumed high level diplomatic activity. On May 22-23, Prime Minister Narendra Modi paid an overnight visit to Teheran, which should actually have come soon after the Joint Comprehensive Plan of Action (JCPOA) was signed on October 18, 2015, between P5+1 and Iran. It should have been interspersed between the hosting of Crown Prince of Abu Dhabi and the PM travelling to Riyadh. President Pranab Mukherjee left for China the day after the PM’s return. 

The strategic context today is quite different from the one when PM Atal Behari Vajpayee visited Iran in 2001 and the Teheran Declaration was announced. India and Iran then had strategic convergence over the need to curb the Taliban, counter Pakistan’s meddling in Afghan affairs, etc. Iran was also hemmed-in by Saddam Hussein in the West and Taliban in the East, besides the US-friendly Gulf Cooperation Council (GCC) in the South. Post JCPOA, Iran is emerging from isolation and exploiting its widened influence in the entire West Asia and Gulf. It is contesting Saudi Arabia’s leadership of the Islamic world and aligning against Sunni forces in Syria, Bahrain and Yemen. The US has resurrected its 1970s twin- pillars security construct, the difference being that instead of the redoubtable Shah of Iran, they get a revolutionary Islamic regime, and instead of the cash-laden and oil-rich Al Saud clan of Saudi Arabia, they have a nervous rump of the ruling family belonging to the Sudeiri wing of Al Sauds. Iran also appears to have a more calibrated relationship with Pakistan and its Afghan ally, the Taliban. 

Mullah Akhtar Mansoor, successor to Taliban’s founder Mullah Omar, perished in a US drone strike near Af-Pak border on May 20. According to the Pentagon, he was a hurdle in the path of negotiated reconciliation. Whether this is the Pakistan army surrendering an asset to appease the US Congress blocking military aid and F-16s or the US degrading Pakistan’s meddling in Afghan affairs, only time will tell. The presence of Afghan President Ashraf Ghani for the trilateral accord over the development of the Chabahar Port would have allowed the PM to explore the possibility of reconciliation in Afghanistan, without which the port project would be a non-starter. 

Twelve agreements were signed, but essentially the following issues were at play. First, an agreement to develop the Chabahar Port with Indian finance. However, the mere access to two docks for 10 years would be inadequate as India needs warehousing space for Indian companies to create storage and assembling base for their products. The Islamic regime has traditionally been chary to transfer ownership of land or natural resources like oil and gas to foreign agencies. Their parliament has yet to pass a new investment law. Exaggerated expectations would thus be premature about India getting freer access to oil and gas fields. 

Secondly, the old North-South transit corridor trilateral arrangement between India, Iran and Russia has been besotted by problems like excessive transport and handling charges by Iran, extortion by Russian mafias, lack of reverse flow of goods leading to empty containers getting stuck at European destinations. Basically,  some transit time is gained compared to transportation via the Suez Canal, but the prevailing hassles negate its usefulness. 

Thirdly, time-bound action by the third quarter of this year has been prescribed in the joint statement in the oil and gas sectors to finalise Indian participation in production, etc. The China-Pakistan economic corridor as an attractive end-user of Iranian gas has been a new variable. Thus India will find itself negotiating with its back to the wall, the Chinese/Pakistani foot being in the door. Iran has yet to get parliamentary approval for a more liberal production sharing contract, without which there has been lukewarm interest by oil majors in investing in Iran. 

Finally, the Iran-US relations are still far from normal, as the US still broadly forbids its citizens from exporting goods, services or technology, directly or indirectly to Iran, except exempted items like Iranian carpets, caviar, pistachios and foodstuffs. US financial institutions are prohibited from processing payments related to Iranian oil and the Central Bank of Iran. Iran’s Supreme Leader Ali Khamenei, in his March 21 Noruz address, disparaged the deal, saying the lifting of the sanctions was only on paper. Others have argued that integration into global economy may be detrimental to the goals of Islamic revolution. That is why the initial gold rush has abated as real deals have been scanty.

Iranians must have wanted to assess whether India was ready for an Iran policy insulated from India-US and India-GCC relations. India, in turn,  should have determined how Iran proposes balancing relations with India against growing the economic and military cooperation with China. For instance, the Chabahar Port project is marketed in India as an antidote to the Sino-Pak development of Gwadar. In reality, Iran’s laissez faire attitude was reflected in President Rouhani’s remark that the trilateral agreement on Chabahar was open to others to join. The Chinese may well dovetail Chabahar into their One Belt One Road (OBOR) initiative. 

PM Modi’s visit perforce resurrected some themes in Teheran and Delhi Declarations of 2001 and 2003, respectively. Iran has been a dissatisfied power since the 1979 Islamic revolution, resenting a role deficit regionally and paranoid about regime survival. Following the JCPOA, its strategic options and reach have expanded. However, the contestation between Sunni powers led by Saudi Arabia, as indeed US/Israel and Iran, and its Shia allies and affiliates has yet to fully play out. 

The Modi government, like China and Russia, is trying to play both sides without getting embroiled. But both those powers have UN Security Council vetos. Besides, the Chinese have tremendous capacity for project exports and licit and illicit transfer of dual-use technologies. Iran will adopt a hedging strategy between the US and the EU, India and Pakistan, China and India, and so on, to consolidate its influence in the region while seeking investment in a calibrated manner. In conclusion, Henry Kissinger’s remark is apposite that to assume “equal possibility of all contingencies is to confuse statesmanship with mathematics”. The India-Iran relations will test such statesmanship as India discovers that Iranian words often disguise their intent in their tradition of “taqiyya” or dissimulation. 

 — The writer is a former Secretary, Ministry of External Affairs

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