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Until creation of Pakistan in 1947, India and Iran had been neighbours. Sharing of a common civilisational space over millennia had given birth to a close cultural identity. However post independence India and Teheran found each other on different and divergent tracks.
Under the Shah, Teheran became a cog in the US led Western alliance against the Soviet Union. On the other hand India despite its strenuous attempts at emphasising its non aligned credentials, was perceived to be in the Soviet camp. Shah also found it easier to relate to military dictators of Pakistan rather than the populist, ideologues in India. A weak, unsure, bankrupt India was of little interest to Iran. Of course India continued to be a customer of Iranian oil and some trade flowed in the reverse direction also. But by and large Indo-Iranian relationship never acquired any degree of depth. Then in 1979, Iran got caught up in the violent whirlwind of its Islamic revolution and for next several decades virtually shut itself to the world at large. With the end of the cold war, the world and with it India changed. Under President Khatami Iran made a feeble attempt to break out of its isolation but before much could happen, it was again overtaken by events. President Bush declared it as a state sponsor of terror and a charter member of the ‘axis of evil’. Two term presidency of Ahmednejad pushed Iran deeper into the hole than ever before. Now after decades of political isolation, Iran under the newly elected president Hassan Rouhani appears to be emerging from the shadows. Regime of sanctions imposed by the international community led by the US is biting hard and the resulting pain that Iran is suffering is plainly visible. Its currency has lost nearly 50 per cent of value and inflation is running at about 40 per cent. Rouhani fighting the election on a platform of moderation attracted millions of young voters frustrated with being denied the opportunities for a better life. The strong mandate for change suggests that Iran could be ready to shed its outlier image and reintegrate with the international community. This has opened the door a crack for the world at large to do business with Iran.
Coincident with the change of atmospherics in Iran, the rapidly changing geo-political environment of the Middle East and South Asia has brought to the fore commonality of interests between Iran and India. The most obvious of them of course is India’s need for energy which Iran is well placed to meet. Also, in light of Pakistan’s denial of its territory for transit of Indian goods, Iran is the most practical gateway for India’s trade with the resource rich states of Central Asia. In view of this ground reality, India has decided to invest $100 million in developing facilities at Chabahar, an Iranian port on the Makran coast lying 120 km West of its border with Pakistan. From Chabahar India hopes to feed its exports into the proposed North – South rail corridor stretching all the way to Europe through Central and West Asia. Iran in turn will benefit from transit fees etc. Coupled with these features of mutual interest with a past, there is the emerging reality of a vacuum being left behind by scheduled withdrawal of US forces from Afghanistan by end of 2014. The state of play of forces in the arena is such that Taliban remains the strongest contender to fill that void. Such an outcome is a source of deep anxiety to both India as well as Iran. India has invested much blood and treasure to deny Taliban and its supporters in the Pakistani establishment a free run in post 2014 Afghanistan. Iran on its part has also been a generous donor of aid to stabilise Afghanistan. Following the 9/11 attacks on the United States, both India and Iran had supported the Northern Alliance in its fight against the Taliban. Now with the perception that forces of Wahabi Islam had humbled yet another super power, the contest for power in Kabul is likely to be bitter. Both India and Iran have a shared interest in shaping a peaceful transition to a moderate order in Afghanistan. A comprehensive 360 degree view of developments in the Middle East is important to understand the context in which this drama could be unfolding.
As the sole surviving super power, United States is the major extra regional player influencing the course of events in the Middle East. Saudi Arabia and Israel have been the lynchpins of its policy in the region. Saudi Arabia has been crucial to the US for commercial oil interests. Its insecurity also made it a significant importer of western arms which kept the military industrial complex humming with profitable activity. The construct of this relationship survived even the ghastly aftermath of 9/11 despite the fact that 15 of the 19 hijackers were Saudi citizens It is a well known and widely acknowledged fact that even today Saudi money continues to be the major source of funds to production factories of Jihadi fanatics all over the world. The fountainhead of extremist political Islam which threatens to plunge the world in endless conflict derives its inspiration and funds from Saudi sources. And yet the cozy US-Saudi relationship has spluttered on.
Israel resonates differently both at the level of general public’s sentiment as well as in the politics of the United States. Besides close identification due to their common Judeo-Christian roots, Israel is viewed as the main bastion of US interests in a region otherwise inhabited by apparently reactionary forces subscribing to a way of life alien to Western sensibilities. Given the strength of public emotion towards Israel, no political party in the United States can survive the charge of being less than completely pro-Israel.
At the opposite end of the scale is Iran. From being its closest ally during the Shah’s regime, US and Iran became sworn enemies in the wake of the Islamic revolution in 1979. Humiliated by the hostages episode, United States bled Iran by supporting Sadam Hussein when he attacked a weakened Iran in the throes of its revolution. Later it got routinely accused of supporting Shia militia in Iraq with weapons and improvised explosive devices (IEDs) which were killing American soldiers by the score. An enraged United States had no patience to consider Iranian President’s offer of a ‘grand bargain’ to normalise US-Iranian relations. Since then Iran’s nuclear programme, its support to Hamas and Hezbollah in their fight against Israel and its overheated rhetoric against the United States and Israel has kept the pot boiling. In the ongoing war of words, often the prospect of Tomahawks over Teheran had appeared all too imminent. What held the American hand (despite Israelis constantly calling ‘wolf’) is its bitter experience in Iraq and the utter unpredictability of consequences of recourse to this action.
US invasion of Iraq has had a most unexpected aftermath in the region. With the majority Shia now in power in Iraq, Iran’s influence in the region has increased exponentially – thus upsetting the tense balance existing since the Islamic revolution in Iran. Coupled with that, a perception now seems to be taking hold that United States and Iran could be resetting their relationship to the detriment of Iran’s regional rivals. Take the civil war in Syria. However it might have started, for all intents and purposes, it is now a proxy war between the Saudis and the Iranians. Saudis had taken it for granted that Americans would weigh in on their side and bomb the Syrian regime out of existence. They wanted to see the demise of Syrian regime just as much for their antipathy towards Assad as to clip Iranian wings. Americans for their own reasons haven’t played ball and the Saudis are livid.
Instead, we now have an accord (albeit limited in scope) between Iran and P-5 plus Germany over Iranian nuclear programme and easing of some sanctions. The deal in Geneva is being interpreted as not only some relief from sanctions which were choking the Iranian economy but perhaps also the first baby steps in US - Iran rapprochement. The very thought has set the alarm bells ringing in Riyadh.
Despite the hopeful signs of a reset, there is no doubt that many interests on all sides remain deeply entrenched in the hostile status quo between United States and Iran. But under a moderate leadership which replaced Ahmedinejad in June elections, Iran is likely to move along a more liberal, conciliatory path. Reciprocally noose of sanctions crippling the Iranian economy is also likely to loosen with time. As Iran reemerges from its isolation in the international arena, it will open up vast opportunities for foreign businesses.
View from India
Despite strong convergence of interests India has had to calibrate its dealings with Iran within bounds of sanctions imposed by the international community. Quite understandably, Iran is sensitive to alignments in its disputes and uses its leverage to shape desired outcomes. India voted against Iran at the IAEA in 2005. As a direct consequence a deal under which Iran was to supply 7.5 million tonnes of Liquefied Natural Gas (LNG) annually immediately went into a limbo. Therefore it is a given that so long as Iran remains under sanctions, Indo-Iranian relations can not achieve their full potential.
However if it is not to be left out in the cold, India must remain alert to take advantage of openings that are likely to emerge with gradual loosening of sanctions.
While seeking to deepen its engagement with Iran, India also has to be mindful of its other interests. Sanctions are perceived to have been very effective in bringing Iran to the negotiating table. Having come this far, the noose will be slackened very deliberately to ensure that Iran remains in compliance. India will have to tread cautiously and in step lest it be seen to be undermining international efforts in this direction.
India also has a vital stake in its relations with the neighbouring GCC countries. Over six million Indian workers earn their livelihood there and repatriate billions of dollars to their families back home. So long as tussle for influence in the region between Iran on the one side and Saudis along with the sheikhdoms of the Gulf on the other persists, India will have to walk the tight rope to balance its relationships. Tensions in the region are also being cast in sectarian terms of deepening Sunni-Shia divide. For the sake of harmony at home, India must not be perceived to be taking sides in this inflammatory dispute.
The emerging scenario would clearly be as tough a test of Indian diplomacy as any. What benefit India can harvest from Iran’s likely opening to the world would depend much on the alacrity with which our establishment responds to the new possibilities.
..:: India Strategic ::. Foreign Relations: India’s moment in Iran
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