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    South Asia
     Jan 12, 2005
The glue that bonds India, Iran
By Sudha Ramachandran

BANGALORE - Last week India and Iran signed a multibillion-dollar deal under which Iran will supply India with 7.5 million tons of liquefied natural gas annually for 25 years beginning 2009. The deal also envisages Indian participation in the development of the Yadavaran and Jufeyr oilfields in Iran.

The warmth that the gas deal will provide to the growing India-Iran bilateral relationship is likely to be noted with concern by several countries, especially the United States, Israel, China and Pakistan.

India's ties with Iran have grown significantly over the past decade. Relations were not particularly good before that; the two countries were on opposite sides during the Cold War - Iran under the Shah was a close ally of the US while non-aligned India was close to the Soviets. The India-Iran relationship remained distant after the 1979 Islamic Revolution too, with Iran warming to Islamic Pakistan rather than secular India.

It was in war-torn Afghanistan in the 1990s that India and Iran discovered that they shared security concerns - the threat posed by the Pakistan-backed Taliban regime in Afghanistan, for one. Shi'ite Iran saw its security interests threatened by the Taliban and predominantly Sunni Pakistan. This led to Tehran redefining its perception of India and its relationship with it.

India and Iran both backed Afghanistan's Northern Alliance for several years in an effort to dismantle the Taliban regime. The two countries also discovered their shared interest in accessing Central Asia's natural resources. In January 2003, Iranian President Mohammad Khatami was the chief guest at India's Republic Day Parade - an honor Delhi reserves for its closest friends.

Bilateral relations received a big fillip during that visit: the two countries signed an agreement that envisaged greater strategic cooperation and put in place military and energy deals valued at over US$25 billion. According to reports in the media, the two countries signed a secret accord that gave India access to Iranian bases in the event of war with Pakistan. Both governments, however, denied that such a deal had been struck.

Bilateral defense cooperation in recent years is believed to be robust. Two months after Khatami's visit, India and Iran conducted joint naval exercises. India is said to be selling arms to Tehran, training Iranian military personnel and helping Iran maintain and upgrade its Russian-made military hardware and fighter aircraft. Bilateral exchanges of defense and intelligence officials are now routine.

India is also assisting in the development of Iranian port facilities and with the construction of road and rail links in that country. India, Iran and Russia have talked of creating a Russo-Iranian-Indian transport corridor that could radically transform political, strategic and economic realities in the region. Bilateral trade too is looking up. In 2003-04 India-Iran trade was $1.18 billion, up from $913 million in 2002-03.

Anxious onlookers
The growing proximity between India and Iran has triggered concern in Washington, Jerusalem, Islamabad and Beijing. China's demand for energy, like India's, is growing at a rapid pace and Beijing and Delhi are in competition over Iran's oil. India's profile in Central Asia is growing rapidly and this, too, worries China, which also has huge interests in that region. Meanwhile, India-Iran cooperation, especially in the defense field, alarms Pakistan, which since September 11, 2001, feels encircled by hostile governments in India, Iran and Afghanistan.

India's growing friendship with Iran is also at odds with its simultaneous improvement in ties with the US and Israel. Like Pakistan (but for different reasons), Israel is concerned about India's defense ties with Iran. Israel fears that India could divert Israeli military technology to Iran, a country it describes as the "epicenter of terrorism". This concern was in fact raised by the Israeli delegation during Prime Minister Ariel Sharon's visit to India in September 2003. Sharon is said to have demanded explicit guarantees from India that it would not transfer any technology acquired from Israel to a third country, especially Iran. India, while assuring Israel that such "leaking" would not happen rejected Israeli calls to shun Iran.

As for the US, although India's increasing economic engagement with Iran counters Washington's effort to isolate the Iranian government, this has not worried the Americans as much as Delhi's growing defense cooperation with Iran has. Like Israel, the US is worried that its military technology could fall into the "wrong hands" - Iran's, for instance. Iran is among the countries that the Bush administration has described as constituting the "axis of evil".

But it is with regard to its effort to curb Iran's nuclear ambitions that the US will closely watch India's response. Delhi and Washington have been gradually identifying ways they can cooperate in preventing the further spread of nuclear technology as part of their Next Steps in Strategic Partnership.

Preventing a nuclear Iran, even effecting a regime change in that country, is a major foreign-policy goal for the US. While India might prefer not having more nuclear weapon powers in its neighborhood, it has sought to avoid taking a public position in the non-proliferation efforts aimed at Iran. India is anxious to ensure that its own nuclear program will not come under international pressure and to this end prefers to maintain a silence on the Iranian nuclear program.

It was only in November that India broke its silence on the issue when Prime Minister Manmohan Singh called on Iran to "honor the obligations and agreements to which it is a party". Singh also said that India hoped that the issue would not be "excessively politicized" and that "it can be dealt with within the framework of dialogue between Iran and the [International Atomic Energy Agency]". Clearly, Delhi is uneasy with the United States' objectives and role in the crisis. How India will respond in the event of the nuclear crisis reaching some kind of showdown remains to be seen, especially in the context of India's growing ties with Israel and the US on the one hand and the warming relations with Iran on the other.

India's interest in Iran stems primarily from its demand for oil, a thirst that Iran is in position to satiate. Iran is the Organization of the Petroleum Exporting Countries' second-largest oil producer and sits on 10% of the world's proven oil reserves. It also has the world's second-largest natural-gas reserves. Delhi sees Iran as a viable corridor to access the natural resources and economic opportunities of Central Asia and Afghanistan.

Delhi also values Iran's support to India on the Kashmir question and sees Tehran as its friend in the Islamic world.

Meanwhile, Iran sees in India a cost-effective source of high-technology inputs. More important, it sees in India potential means to break out of its isolation caused in part by the United States' containment policies.

Christine Fair, a South Asia specialist at the Washington-based United States Institute for Peace, points out that "India's value in this regard has only expanded in recent years as India has forged key relations with the United States, Israel, the European Union and the states of Southeast and Northeast Asia". Post-September 11 Iran needs India "more than ever". Iran needs friends. And India has extended its hand to Tehran. Last week's energy pact between the two signals that the relationship is based on sound economic calculations and is here to stay.

India says it refuses to see international relations as a zero-sum game. "The United States has its relationship with Pakistan, which is separate from our own relationship with them," says Navtej Sarna, spokesperson of India's Ministry of External Affairs. "Our relationship with Iran is peaceful and largely economic. We do not expect it to affect our continuing good relations with the United States."

India is of course keen to ensure that the upswing in its multi-dimensional relations with US continues. It is also anxious to preserve its growing military ties with Israel. This could restrict Delhi's dreams of deepening engagement with Iran to some extent. But India will be reluctant to walk away from Iran as its relationship with Tehran provides it with immense economic and political advantages. Commenting on the Iran-India-Israel relationship, P R Kumaraswamy, professor at the Jawaharlal Nehru University in New Delhi, warns that Israel "will have to recognize, accept and accommodate India's interests in cultivating friendly ties with Iran". The US and Israel would both do well to heed that advice.

Several analysts - American and Indian - have pointed out that instead of scowling at the growing relationship between India and Iran, the US and Israel should wake up to the fact that they have much to gain from India's warming ties with Iran. Fair points out that the Iran-India relationship could help advance longstanding US objectives, including regional stability and security, promotion of democracy in Iran and the containment of Wahhabi extremism.

In an article in the International Herald Tribune titled "India + Iran = Foundation for Stability", Stanley Weiss, chairman of Business Executives for National Security (a Washington-based, nonpartisan organization of business leaders)points out, "India's new ties with Iran make it more, not less, valuable to Washington." US President George Bush "should recognize that India and Iran are the key to regional stability, and join New Delhi and Tehran in an axis of friendship", he writes.

Rahul Bedi, Jane's Defence Weekly's correspondent in India, too sees the India-Iranian relationship as a stabilizing force in the region and in accord with Washington's long-term interests. "India and Iran's cooperation began in Afghanistan, where their support was key in overthrowing the Taliban," Bedi points out. "Their continued cooperation will promote the stabilization and development of Central Asia. Perhaps India can also act as a bridge between Iran and the United States."

Instead of watching warily at the growing proximity between India and Tehran, the US and Israel should see how they can leverage this relationship to their benefit. Unlike the US and Israel, Iran has been accommodative of India's growing ties with Washington and Tel Aviv. It has wisely avoided making its interaction with India hostage to the latter's ties with the US and Israel, an approach that Washington and Tel Aviv can adopt to their own benefit.

Sudha Ramachandran is an independent journalist/researcher based in Bangalore.

(Copyright 2005 Asia Times Online Ltd. All rights reserved. Please contact us for information on sales, syndication and republishing.)

India finds a $40bn friend in Iran (Jan 11, '05)

Iran's nuclear aspirations (Jan 5, '05)

China rocks the geopolitical boat (Nov 4, '04)

India, Pakistan and the 'peace' pipeline (Sep 15, '04)


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