Author : Harsh V. Pant

Originally Published 2018-02-16 08:08:53 Published on Feb 16, 2018
As New Delhi welcomes Rouhani, the two sides will be hoping to assuage each other’s concerns even as they will try to build partnership, which has often struggled to match the rhetoric surrounding it.
Hassan Rouhani in India: Will India-Iran ties match the rhetoric?

In a remarkable display of New Delhi’s ability to balance competing interests in West Asia, India is hosting Iranian President Hassan Rouhani. He’s on a reciprocal visit after Prime Minister Narendra Modi’s visit to Tehran in 2016, which had resulted in a trilateral agreement on transit and transport between India, Iran and Afghanistan. After Israeli Prime Minister Benjamin Netanyahu’s visit to India in January and Modi’s visit to the Arab world this week, Rouhani would be hoping to galvanise the relatively underwhelming India-Iran ties.

Rouhani comes to India at a time when he is facing serious challenges, domestically and globally. The Donald Trump administration has repeatedly threatened Tehran with sanctions and has made clear its disdain for the Iran nuclear deal or the Joint Comprehensive Plan of Action (JCPOA). Though Tehran has maintained a brave front, expecting the Europeans to challenge any move away from the nuclear pact, the economic impact of US threats on Iran is visible. The Iranian Rial has lost a quarter of its value in six months. Domestically, the Rouhani government faced massive protests in numerous towns and cities underlining deep-seated frustration with economic stagnation, mismanagement and corruption, and growing income inequality. Though it did not turn into a popular uprising, it laid bare the domestic tensions in Iran.

Rouhani will be looking at India primarily as a partner at a time when Iran needs investments to revive its economy. India has been a major buyer of Iranian oil and gas and the two nations continued to pursue trade ties even when Iran was globally isolated with sanctions on Iran over its nuclear programme between 2012 and 2016. Iran has emerged as the third largest supplier of crude oil to India after Iraq and Saudi Arabia after the easing of western sanctions. Though it is gradually expanding, India-Iran trade stood at $12.89 billion in 2016-17. India’s investment in Iran’s Chabahar port will give a much-needed boost to bilateral trade, besides expanding India’s trade with Afghanistan and energy-rich Central Asia by circumventing Pakistan. India has committed $85 million for the development of the Shahid Beheshti Port in Iran’s southeastern city of Chabahar and its first phase was inaugurated by Rouhani in December. The two nations are likely to sign an agreement allowing India to run operations in the first phase of the Chabahar port project during Rouhani’s visit.

But there are concerns in Iran that the project is not moving fast enough. This is partly due to uncertainty surrounding Washington’s approach towards Iran as western banks remain reluctant to support Iran-based projects. Iran has also suggested that it is not averse to an eventual role for Pakistan and China in the project, something that would go contrary to India’s logic of investing in such a major project. The two nations have also been quibbling over delays in awarding a contract to develop a major gas field known as Farzad B in the Persian Gulf which was discovered by an Indian consortium led by State-run Oil and Natural Gas Corp. Iran has suggested that the terms India has offered are not profitable. Divergences are also growing on the future of Afghanistan with Iran increasingly looking at Russia and China to coordinate actions with Pakistan in managing peace process.

India’s own stakes in the Arab world and Israel are growing at a time when new fault lines are emerging in West Asia. Israel and the Sunni Arab world, worried about growing Iranian power, are closely coordinating their actions even as Tehran with the help of its proxies is intent on challenging the status quo. As New Delhi welcomes Rouhani, the two sides will be hoping to assuage each other’s concerns even as they will try to build partnership, which has often struggled to match the rhetoric surrounding it.

This commentary originally appeared in Hindustan Times.

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Harsh V. Pant

Harsh V. Pant

Professor Harsh V. Pant is Vice President – Studies and Foreign Policy at Observer Research Foundation, New Delhi. He is a Professor of International Relations ...

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