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Why The Sino-Indian Great Game Extends To Iran – Analysis


Twenty-first century India and China are looking beyond their disputed state frontiers and competing to build road and rail links, or oil and gas pipelines, in foreign countries, and to keep a watchful eye on international sea routes. The lifting of international sanctions against Iran last January raised the curtain over the complex and expanding Sino-Indian great game in Asia.

Home to the world’s second largest gas reserves and one seventh of its oil, Iran, a West Asian power with a population of 80 million, has much to offer energy-hungry India and China. As it recovers from the adverse effects of several years of American-led economic sanctions, Iran welcomes foreign investment, technological support and infrastructure upgrades from India and China to sustain its economic revival.

Why is India thinking west – to Iran?

To counter its archrival China economically and politically, India is already “Acting East” by strengthening economic and defense ties with East Asian countries. A more recent concept, as S. Jaishankar, India’s Foreign Secretary, told a conference in New Delhi in early March, is that of “Thinking West.” ‘Normalization of the situation in Iran is particularly welcome’, he said. That underlined the construction by India of the Chabahar port in south-eastern Iran and strengthening trading ties with Iran.

The significance of the Chabahar project should not be underestimated, for India has not started any comparable ventures in Southeast Asia. Sino-Indian competition in the Arabian Sea has sharpened since 2013, when Pakistan gave China control over Gwadar port. China now has a permanent presence in the Indian Ocean and Persian Gulf and can monitor Indian and American maritime and naval activity in those international waters.

While India intends to use Chabahar primarily for commercial purposes its interest in constructing the port mirrors its wish to counter China’s strategic vantage point in Gwadar.

Chabahar and Gwadar now symbolize the Sino-Indian rivalry in the Arabian Sea, Indian Ocean and Persian Gulf.
Wanting to increase Iranian energy imports and involved with several projects in Iran, India hopes to make Chabahar fully operative by the end of this year. In May 2015 India and Iran signed a Memorandum of Understanding for India to construct the strategically important port which would pave the way for India to gain access by land and sea to Afghanistan and Central Asia.

India’s development of Chabahar suits Iran. Tehran’s fears that China’s Gwadar project would weaken Iran’s position as the entrance to Central Asia prompted it to develop Chabahar with India’s help.

The interest in Iranian energy shows why India accords great importance to economic and strategic connectivity. The fully functional Chabahar port would help New Delhi to ignore Islamabad’s refusal to grant India and Afghanistan transit facilities through Pakistan. This absence of transit rights is the main barrier to India’s trade, energy flows and economic ties with Afghanistan and Iran – and more generally to West and Central Asia. To cross this barrier India wants to build a road running from Chabahar via Afghanistan to Central Asia. This Iran-Afghanistan route could help India to improve access to energy-rich Central Asian countries.

Eventually India envisages that Chabahar could be linked through rail and road networks to the International North South Transport Corridor (INSTC), a multinational project started in 2000 by India, Iran and Russia. But the INSTC needs to be developed if it is to fulfill New Delhi’s hope that it will become the shortest and most economical route from India through Iran and Afghanistan to Central Asia and Europe. Transport costs and freight time from India to Central Asia could be cut by about a third via Chabahar. The port would also provide India with a transit route to Afghanistan. And it would give landlocked Afghanistan an outlet to the sea – an outcome that is favored by the U.S., which was once determined to isolate Iran. India sees its Chabahar project as a potential game changer in West and Central Asia, running parallel to China’s East-West Silk Road.

But China has a head start in Iran. Unlike India, China defied US nuclear sanctions on Iran and bought nearly half of its oil exports. Beijing’s courtship of Tehran saved Iran from international pariah status. That courtship enabled Chinese firms to occupy the space vacated by Western companies that had grown nervous about international pressure on Tehran. China gained uncontested access to Iran’s energy resources.

So when the US and other permanent members of the UN Security Council reached, in April 2015, a preliminary agreement to end sanctions on Iran, China was Iran’s largest trading partner. Bilateral Sino-Iranian trade stood at around $ 50 billion. In contrast, trade between Iran and India amounted to a mere $ 13.13 billion in 2014-15.

India faces tough competition from China in Iran. Beijing’s offer to Tehran last November to develop Chabahar – six months after the signing of the Indo-Iranian MOU – shows that China remains keen to outflank India in Iran.

China’s construction of the economic corridor (CPEC) with its ally Pakistan is one reflection of its wish to enhance its strategic and economic competitiveness in Iran. That worries India, partly because CPEC passes through the contested territory of Pakistani Kashmir, which was the launch pad for recent Chinese intrusions into Indian territory. China has invested $ 46 billion in CPEC. Some of this money is being used to build a new pipeline which starts from the South Pars gas field in Iran. When completed, this pipeline would extend to Multan in Pakistan. The pipeline could help Pakistan to reduce its crippling energy shortages. Most of the 1172 km-long pipeline will run through Iran, which has already completed the pipeline on its side of the border with Pakistan. The Pakistani section of the pipeline remains to be built– so China’s investment in the pipeline will enhance its prestige in Tehran. For Iran is interested in extending this pipeline to China.


India faces an uphill climb as it tries to outmaneuver China in Iran. But India’s determination to upgrade ties with Iran and develop Chabahar with a view to strengthening its ties/connectivity with Afghanistan and Central Asian countries highlights the expanding parameters of the Sino-Indian great game in the rest of Asia.

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Anita Inder Singh

Anita Inder Singh, a Swedish citizen, is a Founding Professor of the Center for Peace and Conflict Resolution in New Delhi. Her books include Democracy, Ethnic Diversity and Security in Post-Communist Europe (Praeger, USA, 2001) ; her Oxford doctoral thesis, The Origins of the Partition of India, 1936-1947 (Oxford University Press [OUP], several editions since 1987, published in a special omnibus comprising the four classic works on the Partition by OUP (2002, paperback: 2004) The Limits of British Influence: South Asia and the Anglo-American Relationship 1947-56 (Macmillan, London, and St Martin's Press, New York, 1993), and The United States, South Asia and the Global Anti-Terrorist Coalition (2006). Her articles have been published in The World Today, (many on nationalism, security and democracy were published in this magazine) International Affairs, (both Chatham House, London) the Times Literary Supplement, the Guardian, the Far Eastern Economic Review, the Asian Wall Street Journal, the Nikkei Asian Review and The Diplomat.

2 thoughts on “Why The Sino-Indian Great Game Extends To Iran – Analysis

  • May 24, 2016 at 9:14 am

    The author goes into an overdrive of pronouncing the Indian outmaneuvering the Chinese investment in Gawader. While for cash rich China, it would be more prudent to find economical and secure ways to do trade with ME/African countries through Gawader. However, Indian investment in Chabahar seems to be more of an egoistic and ‘outdoing’ China-Pak axis manoeuvre, rather that being based on pure economical terms. For the time being it suits Iran to welcome whatever investment it can receive for development of the port, in the long run, it would not make much of a difference as Indian trade with Iran will still be sea based and Afghan/CAR trade share isn’t likely to make Chabahar any more economical.
    Its more a matching move with China’s investment in the region and more to appease the egos, rather than being actually of any substantial benefit. Iran wouldn’t need India to have access to Afghanistan and CAR, all it would want is to get some investment coming in. For Afghanistan, Chabahar would definitely offer an alternative route to the problematic Karachi port, but it would take almost a decade to rely on Chabahar. It done’t also hurt Afghanistan’s ruling elite to make a few more pennys out of Indian investment.

  • January 13, 2017 at 9:17 am

    Very interesting indeed. Actually, the China-Pakistan Economic Corridor(CPEC) is on its way to become an international project with the participation of almost entire Southwest Asia besides some states from the Western Europe. The Pakistan government has already approved the participation of the Russian Federation last week. For India the construction of Chahbahar port would have offered some comfort (India constructing only two berths) however, the project is open to China, Pakistan and other powers to invest. With Iran keen on joining CPEC, Chahbahar and Gwadar deep sea port will likely be complementing each other. Although suggestions have been made by China and Pakistan for India to join CPEC, to my mind, India will be kept outside the Greater Eurasian infrastructure, in particular, for India’s open opposition to CEPEC project, her open support to Baluch sub-nationalist groups and, likely participation in the Western oriented Asia Pivot maritime alliance with United States, Japan, and Australia vis-à-vis the emerging Greater Eurasia Partnership reflecting the emergence of the infrastructure of a new political order. One must take in account that all of the Central Asian countries as member of SCO wish to participate in CPEC. India will not only likely be on the curve, but her membership in SCO subjected to approval in the June summit in Astana might be conditional, if India is opposed to CPEC amid the changing phases of strategic partnerships throughout the global Eurasia. Thanks.


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