Mapping Iran-India Relations – OpEd


India and Iran both states have historical political, economic and strategic relations. Iran is India’s one of largest suppliers of oil in recent decades.

Despite global pressure and sanctions on Iran, India continues to buy oil products from Tehran, which suits New Delhi’s economic environment as it is cheaper compare to other oil producing countries. Reflecting the current geopolitical realities, India’s position on Iran’s oil import vastly differs its previous stance. 

Iran, for a long period of time, was consistently one of India’s top-three oil suppliers. Energy was the bedrock of India-Iran economic ties for decades, to the point that critical infrastructure such as Mangalore Refinery (MRPL) was largely built keeping in mind supplies of the kind of heavy crude that came from Iran. At this time, MRPL started to look at alternatives but also hoped for consistent sanction waivers from US, which would allow it and others in a similar boat to import Iranian crude oil. 

Indian-Iranian partnership is not only limited to economic domain only. Both countries have also undertaken various steps and worked on different projects to enhance their strategic bonding as well. For instance, to keep an eye on Pakistan’s strategic port of Gawadar, India has been investing and upgrading port of Chahbahar. Indian investment on port of Chahbahar also aims at competing port of Gawadar in order to watch Chinese interests as well. India considers the port a golden gateway to bypass Pakistan and enhance trade with Afghanistan, Central Asian Republics (CARs) and East European countries. But, the situation is different now. Indian priorities are changing in the region with regards to its foreign policy objectives.  

In lieu of the changing global geopolitical and geostrategic dynamics, India is moving on and trying to explore more economic and strategic avenues. Russia and Israel are the other countries, which suits Indian foreign policy goals. Russia and Israel both are India’s largest arms suppliers. In addition to this, Russia is supplying cheap oil and wheat to India, which is pivotal in providing economy relief to the inflation hit India. As per the report of Stockholm International Peace Research Institute (SPRI) India imports 13% of its arms from Israel, its third largest supplier after Russia and France. India is also Israel’s largest arms client, accounting for a reported 43% of its exports from 2015 to 2022. The two countries’ bilateral annual trade (excluding defense) was $4.14 billion last year, up from $200 million in 1992, and they hope to finalize a free trade agreement by next June.

In the past, India’s closeness with Israel – particularly the personal rapport between Modi and PM Netanyahu – seemed to irk Iran. Even both India and Israel are having strong ties with other Gulf state UAE. Neither Israel nor UAE have deeply impacted India’s relations with Iran. However, Tehran-Delhi relationship became more turbulent in past few months owing to the strategic shift in the region and hostile attitude of US and Israel towards Iran. India had been the second largest importer of Iranian crude oil, which made up 10 percent of India’s energy imports at the time, but those dropped to zero after the sanctions were enacted. As per report of World Bank in 2021, bilateral trade between India and Iran, which had previously exceeded $17 billion, suddenly fell to $3.5 billion, with Iran currently buying five times as much as it is exporting to India.

India is tilting more toward Israel and the Gulf states, because there’s so much more to gain from them than from Iran at this point. Iran can’t invest in India. Likewise, India can import oil from other Gulf countries. Security cooperation is much stronger with Israel. The diaspora is not as strong in Iran as it is in the Gulf Arab countries.

In a new era where New Delhi is positioning itself as a pole in a multipolar order, and a voice for the Global South’s interests at forums such as G20 along with a tacit acceptance of what future global order will look and the space for hedging against Western partners and their interests will become much smaller compared to what it has been historically.

The Chabahar Port project was portrayed as a symbol of India’s increasing strategic position in its relations with Iran as it was touted to be New Delhi’s gateway to Afghanistan and CARs. Although employing its full potential is contingent on an external factor. India has been maintaining a balancing act in its Middle East policy. Currently, there is a realization in India that the prolonged confrontational ties between Iran and its neighbors are indeed damaging to India’s ties with the Gulf region. Therefore, Iran-India relations over the last four decades could not attain the maturity they should have. 

As tensions between Israel and Iran threaten to embroil the entire region, the consequences for India will be quite serious. This would pertain to not only managing its energy security, for which it depends on regional stability in West Asia. It would also be about India’s ability to navigate ties between the Arab world and Israel on the one hand and Iran on the other. 

The writer is Islamabad based expert of strategic affairs

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