Recent reports coming out of New Delhi indicate that India does not
intend to comply with the unilateral economic sanctions imposed upon
Iran by the United States and the European Union. In fact, the opposite
may be true. India may attempt to take advantage of new opportunities
in Iran created by the sanctions imposed on oil sales and financial
transactions by Western powers.
The Indian Commerce Secretary announced a few days ago, “We will be
mounting a mission to Iran at the end of the month to promote our own
exports. A huge delegation will be going.” While acknowledging that
India was honoring the four rounds of sanctions imposed upon Iran by the
United Nations, the Indian official made clear that India was not
willing to go along with the American-European sanctions. He asked rhetorically, “Tell me why I should follow suit? Why shouldn’t I take up that business opportunity?”
At the same time, the state-run Hindustan Petroleum Corporation
signed a deal to import three million tons of crude oil in 2012-13 from
Iran, almost half of which will be paid for in Indian rupees. And
according to The Hindu newspaper, India and Iran are negotiating a
barter deal to trade Iranian oil for Indian goods in order to get around
U.S. sanctions on Iran’s Central Bank.
Converging economic interests
Iran is India’s second largest source of crude and provides about 12
percent of India’s oil imports. Last month, India surpassed China to
become the largest importer of crude from Iran. India perceives Iran to
be an important economic partner and one that is crucial for India to
meet its growing energy needs. India also sees Iran as a lucrative
foreign market for its manufactured goods and services.
Additionally, with Iran’s proven natural gas reserves amounting to
about 15 percent of the world’s total reserves, India is interested in
developing relations with Tehran both to import explore Iranian natural
gas. In January 2005, the Indian government signed a $40 billion dollar
gas deal with Iran that would guarantee India 7.5 million tons of
liquefied natural gas over a 25-year period as well as allow India to
develop two Iranian oil fields and a gas field. So far, none of these
plans have come to fruition.
However, in early February 2012, Iran gave India's Oil and Natural
Gas Corporation a one-month deadline to sign the contract for the
development of Iran's offshore Farzad-B gas field in the Persian Gulf.
New Delhi had been dragging its feet on this issue because American
sanctions on Iran have complicated attempts at economic cooperation. The
latest Iranian ultimatum is likely to help speed up the process.
For close to a decade now, India has also been discussing the possible construction of a transnational gas pipeline
from Iran’s South Pars field to India via Pakistan. Agreement on this
pipeline has been held up partially due to high costs and partially
because of India’s reluctance to become dependent upon archrival
Pakistan’s goodwill for the assured supply of even a part of its energy
needs. The deteriorating security situation in the Baluchistan province
of Pakistan through which the pipeline has to pass has added to Indian
concerns about the tripartite pipeline deal. Nonetheless, negotiations
on the issue continue and may eventually lead to a positive outcome
despite American pressure on New Delhi to renege on the proposed
Converging nuclear interests
In addition to these economic interests driving Indian-Iranian
relations, there is also a convergence of strategic interests between
New Delhi and Tehran. Some of these strategic interests bear on the
nuclear issue; others deal with broader regional considerations.
Few countries know better than India the travails of trying to
acquire nuclear capability in the face of opposition from the
international nuclear establishment. India suffered from sanctions on
dual-use technology - a catch-all term that could cover harmless items
essential for power generation and for civilian use of nuclear
technology - for decades because it refused to sign the Nuclear
Non-Proliferation Treaty and give up its autonomy of decision making in
the nuclear sphere.
It was in the context of these sanctions that the Indian strategic
community invented the term “nuclear apartheid” to describe the attempt
by the five permanent members of the Security Council to preserve their
monopoly on nuclear weapons and shut others (with the exception, however
clandestine, of Israel) out of the prestigious nuclear club.
India was too proud, too large, too self-sufficient in technological
terms, and, above all, situated in what New Delhi perceived to be a
threatening security environment to give up the quest for the nuclear
bomb. It succeeded in making a de facto entry into the
exclusive club following its nuclear tests of 1998. India did so despite
the best efforts of the United States and China, in particular, both to
prevent it from acquiring nuclear weapons capability and, after the
1998 tests, to bar it from becoming a legitimate member of the nuclear
New Delhi is highly skeptical of Western allegations that Tehran is
close to acquiring weapons capability. In any case, India does not feel
threatened by Iran’s acquisition of rudimentary nuclear weapons
capability, which most Indian strategic analysts believe is for
deterrent and defensive rather than offensive purposes.
Furthermore, India believes that given its past experience, it is in a
better position than most countries to understand Iran’s current
painful dilemma of choosing between security and economic growth. This
explains the instinctive sympathy that India’s political and
intellectual elites feel toward their Iranian counterparts now faced
with much the same predicament that New Delhi countenanced for three
decades from 1970 to 2000.
It is true that India voted against Iran in the International Atomic
Energy Agency Governing Body meetings in September 2005 and February
2006. The latter vote was on the crucial resolution referring the matter
of Iran’s nuclear program to the U.N. Security Council, thus opening
the way for the imposition of sanctions on Tehran for not cooperating
adequately with the international nuclear watchdog.
This vote temporarily chilled relations between India and Iran but
both countries had the political wisdom soon to insulate the nuclear
issue from other aspects of their bilateral relations. India also voted
in November 2009 at the IAEA in favor of censuring Iran for not
informing the IAEA in a timely manner about its Qom nuclear facility.
This vote also did not seem to have major negative repercussions on
However, these votes, especially the first two, came after intense
agonizing within the Indian government. Diplomatic cables made available
by Wikileaks make clear that American diplomats in New Delhi were highly uncertain
in 2005-06 that India would go along with the Western powers in
censuring Iran given the opposition to such a move both from within the
government, including parts of the bureaucracy, and the strategic
community outside the government.
Both votes were followed by strong criticism of the government in the
Indian media by respected journalists and public figures. These
prominent Indians claimed the government had sacrificed the future of
Indo-Iranian relations at the altar of a civilian nuclear deal then
under negotiation between India and the United States.
A civilian nuclear agreement was signed in October 2008 and subsequently cleared by the Nuclear Suppliers Group. The deal gives India access
to dual-use technology in return for placing 14 of its 22 nuclear
reactors under IAEA supervision and agreeing to separate its military
and civilian reactors. While periodic hiccups keep occurring in the
process of implementing the so-called “123 agreement”, the major hurdle
seems to be crossed from the Indian perspective, thus restoring some of
the autonomy that India has always cherished in the sphere of
international nuclear politics. India’s current policy toward Iran may
be an early sign that it no longer needs to coordinate its policy on
nuclear issues with the United States.
Converging geopolitical interests
India-Iran relations are, however, not solely a function either of
economic compatibility or of nuclear politics or a combination of the
two. They are also driven by a convergence of strategic interests in and
around the region referred to as southwest Asia. This region includes
Afghanistan, Pakistan and the Persian Gulf in addition to India and
Indian and Iranian interests converge in particular in Afghanistan.
Tehran and New Delhi were the two principal supporters of the Northern
Alliance when it was engaged in conflict with the Taliban regime in
Afghanistan prior to the latter’s overthrow in 2001. Both looked upon
the Taliban as anathema, seeing them as surrogates of Pakistan and
creations of Pakistan’s military intelligence.
While India’s concern regarding the Taliban was primarily
Pakistan-centered, Shia Iran’s animus toward them was ideological and
sectarian as well. Moreover, Tehran saw the Taliban as an instrument of
Saudi Arabia’s anti-Iranian strategy in the region even if Pakistan was
used as the conduit by the Saudis to prop up the viscerally anti-Shia
regime in Kabul.
Both India and Iran extended aid and succor to the Northern Alliance
and were relieved when the American-led invasion, which used the
Northern Alliance as its spearhead, toppled the Taliban regime and
expelled al Qaeda from Afghanistan.
The current state of uncertainty in Afghanistan with the impending
withdrawal of NATO forces from that country and the simultaneous rise
once again of the Taliban supported by elements within the Pakistani
military highlights for both capitals the importance of Indian-Iranian
strategic cooperation in Afghanistan.
Although Iran-Pakistan relations appear smooth superficially, Tehran
harbors deep distrust of Islamabad because it perceives the latter to be
a surrogate both for Saudi Arabia and for the United States - Iran’s
two chief antagonists in the region and beyond.
India, on the other hand, is seen by Tehran as a benign power with
ambitions that do not collide with those of Iran. In fact, it is seen as
a potential partner for the construction of a durable security
structure in southwest Asia that would exclude foreign powers,
especially the United States, as well as keep Saudi and Pakistani
“mischief making” capabilities in check. This seems to be the principal
reason why Iran has turned a blind eye toward New Delhi’s growing
defense relations with Israel. Similar considerations have led Tehran to
insulate Indian-Iranian relations from India’s burgeoning economic
relations with the Gulf Cooperation Council countries, particularly
Saudi Arabia, which is the largest supplier of crude to India.
In short, India-Iran relations are multi-dimensional and of
considerable strategic and economic value to both countries. New Delhi
and Tehran also have similar ambitions to be recognized as pre-eminent,
if not predominant, powers in their respective regions – South Asia in
the case of India and the Persian Gulf in the case of Iran.
Furthermore, they are cognizant of the fact that while occasional
differences and even conflicts of interest may arise in their future
relations, there are no major clashes of interests visible on the
horizon. In contrast, there are enough common interests, both economic
and strategic, that are likely to bind the two countries together and
help them reach their shared goal of regional pre-eminence in the two
contiguous but clearly demarcated regions of South Asia and the Persian
Gulf. India’s refusal to go along with sanctions imposed on Iran by the
United States and Europe highlights New Delhi’s recognition of Iran’s
importance to India over the long term.
Mohammed Ayoob is University Distinguished Professor of
International Relations at Michigan State University and Adjunct Scholar
at the Institute for Social Policy and Understanding.
This article was published by CNN on February 21, 2012. Read it here.