India’s clear stand on oil imports from Iran is driven by a number of economic and strategic factors. New Delhi wants to send a clear message, that it has an independent policy, and will not buckle under pressure from Washington DC.  India has significant strategic interests in Iran, the most important being the Chabahar Port which is crucial for India’s connectivity with Afghanistan as well as Central Asia.

It would be pertinent to point out, that India-Afghanistan and Iran in 2016, had signed an agreement, for setting up a transit corridor amongst the three countries, with a clear thrust on Chabahar Port as a hub. In 2018, the three countries held a meeting to operationalize the trilateral agreement.

India like Iran and Afghanistan faces security threats, and there has been a call for all three to join hands, not just in the context of connectivity, but even security. There was a call for a trilateral alliance to counter terrorism. In September 2018, the three countries had a trilateral meeting in Kabul, where a number of economic and strategic issues, such as connectivity and counter-terrorism were discussed.

A few issues need to be kept in mind. The economic cooperation is way below the potential and it needs to be diversified so that economic ties are more dynamic. It is important to look at the relationship from a broad prism and not restrict ties to oil or the Chabahar Port.  In areas like agriculture, there is scope for greater cooperation between both countries. For increasing the level of Iranian agricultural exports, India should seriously seek to reduce tariffs.

While there have been talks of addressing some of the key logistical issues, which are impeding bilateral progress, there is a need to focus on easing out of visa procedures not just with an eye on giving a fillip to business links, but also people to people interactions and greater interactions between civil societies in both countries. It is also important to build linkages between Indian state governments and Iran, as this will deepen ties.

As the bilateral relationship between Tehran and New Delhi improves, there is a possibility for Iran, to use India as a gateway to other countries in South Asia such as Bangladesh and Sri Lanka.

In conclusion, while the relationship between New Delhi and Tehran has grown manifold, there are a number of basic issues which need to be addressed to enhance awareness about each other’s country and views on crucial issues. It is also important, that the relationship is not restricted to the economic sphere, and ties in other areas, especially people to people links are accelerated. Irrespective of the challenges, New Delhi-Tehran relationship is important from not just an economic standpoint as well as in the geopolitical context. It is bound to grow from strength to strength.