India's Geopolitical Leverage In Iran's Nuclear Deal

While India stands to gain geopolitically if Iran manages to shed off Western sanctions as a result of the agreement reached between Tehran and the P5+1 nations, leveraging the advantage will be a diplomatic tightrope for New Delhi.

As the streets of Tehran broke into jubilation earlier this month following the announcement of the nuclear agreement reached between Iran and the P5+1 nations, the quieter diplomatic corners of New Delhi too joined the celebration, calling the agreement a “success of diplomacy and dialogue” which respects Iran’s right to a peaceful nuclear programme while ending crippling sanctions.

India, which reluctantly stood by the sanctions on Iran, has a huge stake to leverage once (if at all) the EU and the US ease their sanctions on Tehran, provided it fulfills its obligations.

While relaxing of current restrictions on energy import from Iran – the world’s fourth largest oil reserve, is certainly an advantage, India also stands to gain geo-political advantage in the wider Asian region if (and as and when) the Western sanctions on Iran are lifted.

Accessibility to Afghanistan and the Central Asian Region (CAR) has always been of great importance to India. More than anything, these two regions open up an easier trade route for India with the larger access to the Middle East and further to parts of Europe.

India’s investments in the regions – both in terms of resources and diplomatic effort, speak for the kind of strategic importance Afghanistan and CAR have for the country. Apart from donating billions to Afghanistan, making it the fifth largest donor for the country, New Delhi’s keen interest in CAR also drove it to devise what is known as the “Connect Central Asia policy” in 2012 for wider engagement at strategic, comprehensive economic, energy and natural resources co-operation.

However, India doesn’t have direct access to Afghanistan or CAR– land or sea, and has to reach out to the two regions via Pakistan. Given the state of bilateral relations with Islamabad, transiting through the country becomes extremely challenging. Iran, with its strategic location, provides for a gateway or an alternative route to New Delhi, relieving it of the need to transit through Pakistan to reach Afghanistan and the CAR.

More importantly, in Tehran, New Delhi can find a partner that commands considerable goodwill in the region. Iran has played a significant role in the reconstruction of Afghanistan. In 2001, Iran supported the Northern Alliance against the Taliban regime which won Tehran the allegiance of the Tajiks – Afghanistan’s second largest population group that dominate key positions in the government.

Apart from playing a key role during the Bonn I conference that was instrumental in establishing an interim government in Kabul, Tehran also committed reconstruction aid of $560 million in 2002 and $100 million in 2006.

The goodwill Iran has built in Afghanistan will not only expand Tehran’s influence eastwards but will also help transforming its image into that of a responsible regional player. This is where both countries’ interests for a stable Afghanistan merge. Both India and Iran are looking at providing Afghanistan and Central Asia alternative routes to the Indian Ocean.

It is this interest that prompted New Delhi’s decision to participate in the development of the Chabahar port in southeastern Iran to improve geo-political leverage with respect to Pakistan.

Delhi viewed the Chabahar port as a viable alternative route to reach Afghanistan. The country has already committed an investment of about $85 million towards the construction of two berths at Chabahar and the development of a container terminal. In October 2014, Prime Minister Narendra Modi, reaffirmed New Delhi’s support for the Iranian Chabahar port project .

For Tehran, the Gwadar port – a mega port project located in Pakistan’s Baluchistan region which was completed in 2006 with Chinese support, downplays Iran’s role as the ‘gateway to Central Asia’.

The port region could also be made a free trade zone for both the countries to enjoy preferential tariffs, especially for India during its exports en-route to Afghanistan and Central Asia – a step a number of experts feel could be a game changer as this will induce India to step up its investment in Chabahar akin to what China has done in Gwadar.

However, competition is raging up. China has apparently shown interest in Chabahar, offering credit to Iran to upgrade the port. India should be mindful of its previous experiences and avoid facing similar strategic blows as it did in 2010 by losing Tajikistan’s Ayni air-base to Russia after having made significant investment to develop the base. Beijing also managed to bag stakes in Kazakhstan’s massive Kashagan oil field, foiling India’s desire to broaden its footprint in Central Asia.

An overtly closer tie with Iran can also have certain domestic and diplomatic implications for India. India is home to about 10-15% of world’s Shia population. Experts fear the Shia-Sunni tension of the Middle East might spill over to India, which also has a large Sunni population, in case the country assumes a diplomatic posture too close to the Shia-dominated Iran.

India has considerably broad-based diplomatic relations in the Middle East with key partners like Saudi Arabia and the other Gulf Cooperation Council states – major sources of India’s energy import. Qatar, for instance, happens to be India’s largest source of imported natural gas. Saudi Arabia in particular is important, considering the kind of influence Riyadh commands over Islamabad. In addition to this, India is deepening its ties with Israel, one of India’s largest defense suppliers.

Quite clearly, it is an extremely delicate diplomatic tightrope that India has to tread in its policy towards collaborating with Iran, because India not only has significant relations with a number of Iran’s rivals but the relationship with Tehran itself hasn’t been too strain-free always. New Delhi has always felt Tehran, apart from being a tough negotiator and also many a times using India’s energy vulnerability as a pressure tactic to ensure gains in New Delhi’s IAEA votes, has preferred China over India on some deals, providing Beijing much better terms in its energy trade.