The Nuclear Agreement with Iran: Advantage India

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The recently-arrived at nuclear agreement with Iran could hold major advantages for India provided New Delhi moves quickly to grab the opportunity, writes Future Directions International’s LINDSAY HUGHES

Background

The Permanent members of the United Nations Security Council and Germany recently reached a tentative agreement with Iran regarding its nuclear programme.

Doubts remain as to whether the US Congress will permit the agreement to remain in its current form or if it will veto the agreement.

There is also speculation whether Iran’s supreme leader, Ayatollah Khamenei, will do likewise.

Despite this uncertainty, however, it remains likely that the agreement will be accepted by both camps in one form or another. When it is, the lifting of international sanctions on Iran will provide India with a major opportunity to accomplish a number of goals it has long sought.

The Modi Administration will be required to act quickly, however, if it is to make full use of the opportunity provided by the lifting of sanctions on Iran.

PM Modi with Iranian President Hassan Rouhani

Comment

Soon after the agreement was reached by Tehran and Washington to ease the sanctions placed upon Iran, the Iranian Ambassador to India, Gholamreza Ansari, announced that Iranian President Hassan Rouhani, anticipating the full removal of sanctions upon Iranian trade with other countries, had asked New Delhi to invest in infrastructure development projects worth US$8 billion.

“Connectivity is the main policy of Modi that coincides with Iran’s government policy. We have offered them, in connectivity, $8 billion of projects,” he added.

Iran is in the process of developing an integrated transit corridor to connect the Persian Gulf with Central Asia.

One of the projects offered to India is an expanded role in developing the Port of Shahid Beheshti in Chabahar, which is relatively close to the Chinese-managed Gwadar Port in Baluchistan, Pakistan.

India had previously sought a role and was engaged in developing the Chabahar Port for several reasons.

Developing the port would, in the first instance, give New Delhi a port that it could potentially manage and use to transport its energy imports from Iran.

Developing the port would, additionally, enhance its ties with Iran and balance China’s growing influence in Tehran, especially now that China has initiated a project to pipe Iranian energy to its western provinces via Pakistan.

Developing Chabahar Port would also give India access to Central Asia and the region’s energy supplies, bypassing Pakistan, which remains, in India’s view, a potential opponent, a fact underlined by recent attacks carried out, India claims, by militants who crossed the border from Pakistan and killed four policemen and two civilians in India.

Importantly, this would give India easy access to Afghanistan too, where it has strategic and economic interests, bypassing Pakistan again.

Having safe and easy access to Central Asia would allow India to balance Chinese influence there, too.

In the first instance, however, New Delhi will look to diversify and further secure its energy imports.

The easing of sanctions on Iran’s energy exports will once again enable India to import more from there.

Prior to the sanctions being imposed, Iran was India’s second-largest source of oil with 17 per cent. This fell to 6 per cent in 2014.

Given its geographic proximity to India, with the implicit reduction in transportation costs, New Delhi will want to access as much Iranian energy as it possibly can.

It will, however, wish to remove the cost of transporting the energy altogether.

Indian Minister for External Affairs, Salman Khurshid, met his Omani counterpart, Yousuf bin Alawi bin Abdullah, and Iran’s Foreign Minister, Javad Zarif, in February 2014 to discuss the creation of a sub-sea gas pipeline from Oman and Iran to India.

This plan was floated to remove the insecurity posed by having an overland pipeline from those countries pass through Pakistan.

The easing of sanctions on Iran now makes this venture more feasible than ever before.

Added to that, Indian Prime Minister Narendra Modi met Turkmen President Gurbanguly Berdimuhamedov in mid-July this year and signed seven agreements pertaining to fertilisers, defence and natural gas.

If Turkmen gas can be routed from its Dauletabad and Galkynysh gas fields through Chabahar to join the Oman-Iran-India pipeline it would add to India’s energy security and give New Delhi a viable option to the Turkmenistan-Afghanistan-Pakistan-India pipeline, of which many Indian strategists were sceptical since it, too, had to pass through Pakistan.

India could then realise several of its geo-strategic goals in Central Asia.

Turkmenistan’s support for India’s desire to join the Ashgabat Agreement on trade and transit, which includes Uzbekistan, Iran, Turkmenistan, Kazakhstan and Oman, can only add to India’s need to make this pipeline a reality.

And therein lies the problem.

It will need all of Mr Modi’s abilities to cut through India’s notorious bureaucracy and seeming lethargy to ensure the project goes ahead immediately.

India has not been quick enough in the past to seize the opportunities Iran has presented it, notably its loss of the opportunity to develop the Farzad B gas field due to ubiquitous bureaucracy.

It is more than likely with this in mind that Ambassador Ansari, pointing out that New Delhi had to quickly bestir itself, said, “If they drag their feet, the market will not wait.”

Opportunities of this magnitude do not present themselves often. It would be a tragedy if India does not avail itself of this one.

 

Lindsay Hughes is a Research Analyst at the Indian Ocean Research Programme

 

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