{"id":101825,"date":"2019-02-23T10:00:13","date_gmt":"2019-02-23T06:30:13","guid":{"rendered":"http:\/\/www.scfri.com\/?p=713"},"modified":"2022-04-19T15:34:50","modified_gmt":"2022-04-19T11:04:50","slug":"india-iran-relationships-the-multiple-layers","status":"publish","type":"post","link":"https:\/\/scfr.ir\/en\/strategic-perspective\/opinion\/101825\/india-iran-relationships-the-multiple-layers\/","title":{"rendered":"India-Iran relationships: The multiple layers"},"content":{"rendered":"<p><strong>Balancing different relationships<\/strong><\/p>\n<p>Iranian Foreign Minister during his visit to New Delhi in January 2019 reiterated the point, that it takes its ties with India seriously. Said <a href=\"https:\/\/www.firstpost.com\/business\/iran-seeks-indian-investments-in-fertilisers-and-petrochemicals-plans-to-expand-areas-of-cooperation-5857401.html\">Zarif<\/a>, \u2018We are working with our traditional partners like India, like China, like Russia so that we continue to work in the interest of \u00a0our people<\/p>\n<p>This article will examine some of the key economic links between both countries, why the relationship is important from the geopolitical angle and other potential areas of cooperation.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>India-Iran ties the key propellants.<\/strong><\/p>\n<p>In recent years, two factors have been the driving forces for the NewDelhi-Tehran relationship. The first is, India\u2019s dependence upon Iranian oil, and the second is India\u2019s involvement in the Chabahar\u00a0Port &#8212; which will provide India access to Afghanistan and Central\u00a0Asia.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Oil and the India-Iran bilateral relationship<\/strong><\/p>\n<p>The importance of oil in the bilateral relationship is clearly evident\u00a0from the fact that even after the imposition of US sanctions, New Delhi found ways to circumvent the US sanctions. As mentioned earlier, it stood its ground and made it clear to Washington, that it would\u00a0not be able to reduce oil imports from Iran. This in spite of the fact,\u00a0that Washington was not comfortable with New Delhi\u2019s close ties with Tehran \u2013 many <a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/us-firm-india-may-cut-energy-imports-from-iran\/articleshow\/64782981.cms\">senior officials<\/a> of the US administration expressed their discomfort with the growing relationship between New Delhi and Tehran.<\/p>\n<p>The India-Iran relationship is not merely restricted to imports of oil from Iran, Tehran will also be investing in the expansion of <a href=\"https:\/\/www.financialexpress.com\/industry\/iran-to-invest-about-rs-1500-crore-to-boost-capacity-of-chennai-petroleum\/1431184\/\">Chennai Petroleum Corp<\/a> (a subsidiary of Indian oil corporation) in the state of Tamil Nadu.<\/p>\n<p><strong>Payment in Rupees\u00a0<\/strong><\/p>\n<p>As a result of Indian pressure on the US, India\u2014<a href=\"https:\/\/www.cnbc.com\/2018\/11\/01\/trump-near-deals-with-india-south-korea-on-iran-oil-imports-reports.html\">alongside China and South Korea<\/a>\u2014received a U.S. waiver allowing it to continue purchasing a limited amount of Iranian oil.<\/p>\n<p>Apart from this waiver, India and Iran signed an agreement, for oil payment in rupees (<a href=\"https:\/\/www.livemint.com\/Industry\/mJMPwJmgkKM1bp4qfO7qzN\/India-to-import-Iran-oil-using-rupee-payment-mechanism.html\">November 2018),<\/a> and half of those funds had been earmarked for exports.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Why this mechanism is important\u00a0<\/strong><\/p>\n<p>Significantly, this mechanism had been used earlier when sanctions had been imposed, but this time\u00a0<a href=\"https:\/\/www.reuters.com\/article\/us-india-iran-payment-exclusive\/exclusive-indian-refiners-pay-for-iranian-oil-in-rupees-uco-bank-executive-idUSKCN1P21XF\">100% \u00a0<\/a>payments will be in Rupees because certain EU countries were not keen to offend the US, and the SPV would take time.\u00a0<\/p>\n<p><strong>Chabahar Port\u00a0<\/strong><\/p>\n<p>If one were to look at the Chabahar Port (Which is India\u2019s potential gateway to Afghanistan and Central Asia), New Delhi has invested in <a href=\"https:\/\/economictimes.indiatimes.com\/news\/economy\/foreign-trade\/india-to-fully-operationalise-chabahar-port-soon-iranian-bank-branch-to-open-in-mumbai-nitin-gadkari\/articleshow\/67435229.cms\">Phase 1 of the Project<\/a> (capital investment of over 85 Million USD and annual revenue expenditure of nearly 23 Million for a 10-year lease).\u00a0India will operate two berths in Phase 1.<\/p>\n<p>In December 2018, India has formally taken over operations at Iran&#8217;s strategic Chabahar Port, a move, that could have significant geopolitical ramifications in the region. On <a href=\"https:\/\/www.thehindu.com\/opinion\/editorial\/chabahar-tidings\/article25828606.ece\">December 25, 2018<\/a>, India Ports Global Limited opened its office, taking over operations at the Shaheed Beheshti port at Chabahar, Iran.<\/p>\n<p>While an agreement was signed during PM Modi&#8217;s visit in May 2016 not just for India\u2019s involvement in the Chabahar Port, but also for greater connectivity between <a href=\"https:\/\/economictimes.indiatimes.com\/news\/defence\/india-iran-afghanistan-hold-first-trilateral-on-chabahar-port-project\/articleshow\/66337029.cms\">India-Iran-Afghanistan<\/a> connectivity. In February 2018, during President Rouhani&#8217;s visit, an agreement was signed between both countries. <\/p>\n<p><strong>Beyond economics and geopolitics\u00a0<\/strong><\/p>\n<p>Both countries have historic ties. In terms of Soft Power, there is\u00a0scope for more cooperation. This includes tourism and education.<br \/>\nCurrently, the number of Indian tourists visiting Iran ranges from 70,000 and 80,000 while Iranian&#8217;s visiting India is estimated at 40,000 (this includes medical tourists).\u00a0 With Iran offering a visa on arrival facility, there is scope for an increase in Indian tourists visiting Iran, since there are a number of sites which would be of interest to Indians.<\/p>\n<p>Likewise, India needs to look at liberalizing visas for Iranians so that it can attract more tourists. Similarly, there is scope for more cooperation in the sphere of education. The number of Iranian students studying in India is estimated at <a href=\"https:\/\/www.financialexpress.com\/industry\/iran-oil-india-to-sweeten-rupee-payment-terms\/1415151\/\">7,000-8,000<\/a>. With further improvement of ties, this number can go up.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Conclusion<\/strong><\/p>\n<p>Apart from governments, it is the role of Chambers of Commerce, Civil Society Organizations as well as Universities to ensure that New Delhi and Iran look towards a multifaceted relationship where the commonalities between both countries play an important role. \u00a0It is important to rekindle historical linkages of the past and\u00a0utilizing them for fulfilling the economic needs of the future. All stakeholders need to play a role in strengthening the bilateral relationship.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Strategic Council Online: In recent years, one of the very interesting bilateral relationships has been the one between New Delhi and Tehran. While New Delhi has significantly strengthened its strategic ties with the US, it has ensured that economic links with Tehran do not suffer. India has had to do a balancing act not only between US-Iran but also Saudi Arabia-Iran and Israel-Iran. Apart from the US, both Saudi and Israel were uncomfortable with the New Delhi-Tehran relationship, New Delhi has persisted.<br \/>\nTridivesh Singh Maini \u2013 New Delhi based Policy Analyst<\/p>\n","protected":false},"author":7,"featured_media":714,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[34],"tags":[13647,33803,18386],"class_list":["post-101825","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-india-en","tag-india-iran-relationships-en-2","tag-us-sanctions-en"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>India-Iran relationships: The multiple layers - Strategic Council on Foreign Relations<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/scfr.ir\/en\/strategic-perspective\/opinion\/101825\/india-iran-relationships-the-multiple-layers\/\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/\"},\"author\":{\"name\":\"AGOL\",\"@id\":\"https:\\\/\\\/scfr.ir\\\/fa\\\/#\\\/schema\\\/person\\\/d39f31143efe45f618d63ff00063e28e\"},\"headline\":\"India-Iran relationships: The multiple layers\",\"datePublished\":\"2019-02-23T06:30:13+00:00\",\"dateModified\":\"2022-04-19T11:04:50+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/\"},\"wordCount\":728,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/scfr.ir\\\/fa\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"India\",\"India-Iran relationships\",\"US sanctions\"],\"articleSection\":[\"Opinion\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/\",\"url\":\"https:\\\/\\\/scfr.ir\\\/en\\\/strategic-perspective\\\/opinion\\\/101825\\\/india-iran-relationships-the-multiple-layers\\\/\",\"name\":\"India-Iran relationships: The multiple layers - 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