Changing Geopolitical Scenario and Opportunities for Trilateral Cooperation Between India, Iran and Gulf Countries

Iran’s Deputy Foreign Minister for Economic Relations Mehdi Safari, who was in India to promote the ‘Iran Expo’ to be held in May 2023 in Tehran made some interesting points while speaking at the India-Central Asia Joint Working Group meet that took place in Mumbai from April 12-13, 2023.

First, he spoke about the growing economic ties between India and Iran in spite of economic sanctions. A statement quoted the minister as saying:

 “Our export to India has grown 60 percent in 2022, and in the last two months, it has grown 90 percent. This implies diversification of trade away from crude oil. Iran is committed to meet the energy needs of India.” 

He also spoke about the need for facilitating Chabahar Project as a gateway to Central Asia, Russia,  and European markets through the International North-South Transit Corridor (INSTC). India’s state run India Ports Global Limited (IPGL) has been operating  Shahid Beshti terminal in Chabahar Port since 2018 – under an agreement which is renewed annually. Both sides are in talks for a 10-year agreement which will be extended automatically. India has also used the Chabahar Port for transporting wheat consignments under the UN World Food Programme (UNWFP). 

Acknowledging the strategic significance of the Chabahar project, US had provided a waiver from sanctions regarding the development of Chabahar Port. India’s economic ties with Iran and the progress of the Chabahar Project had been impacted when New Delhi stopped importing oil from Iran in May 2019 due to sanctions imposed by the US. 

Since 2021 however, India has been focusing on its ties with Iran and the Chabahar Project. India’s External Affair Minister S. Jaishankar attended the swearing-in ceremony of Iranian President Ebrahim Raisi in August 2021 (there have been a number of high level meetings between officials from both countries ever since). India has been focusing on Chabahar not just as a gateway to Russia and Central Asia but beyond. 

In a tweet pertaining to the relevance of Chabahar Port for achieving India’s connectivity goals, S. Jaishankar said: “… Chabahar port and the International North-South Transport Corridor could become enablers…”

It would be pertinent to point out that India’s trade with Europe has increased through INSTC in 2022, in spite of the Russia-Ukraine war. 

Apart from connectivity with Central Asia, Russia and European markets – Mehdi Safari made two interesting points regarding trilateral cooperation between India-Iran and Gulf Cooperation Council (GCC) countries. First, he said that INSTC will be also used to promote trade with countries like UAE and Qatar. Another GCC member state, Saudi Arabia has joined the Shanghai Cooperation Organization (SCO) which is an important platform for connectivity and economic linkages – as a dialogue partner. India has also discussed the possibility of cooperation with UAE under the umbrella of SCO.

Second, the Iranian Deputy Foreign Minister spoke about extending a sub-sea natural gas pipeline from Oman to India. This project has been conceived over a decade ago and in 2014 India had also joined talks pertaining to the India-Oman-Iran pipeline. Here it would be pertinent to point out that India already shares good relations with Oman driven by not just a large Indian diaspora, but robust economic and strategic relations. India has also invited Oman to attend the G20 as a guest country for attending the G20 Leaders’ Summit to be held later this year in Delhi. Sayyid Badr bin Hamad al Busaidi, Foreign Minister of Oman attended the meeting of G20 Foreign Ministers in Delhi in March 2023.

The Iranian Deputy Foreign Minister’s reference to trade with Gulf countries via Chabahar, and India being part of the India-Iran-Oman pipeline is important because due to the uncertainty in the Middle East, especially strained ties between Iran and GCC countries, India had the onerous task of balancing relations between Iran and Gulf nations. With the improvement of ties between Iran and GCC countries, especially Saudi Arabia and UAE, New Delhi has an opportunity to examine trilateral opportunities with Iran and Gulf nations. One important platform for such cooperation is the Shanghai Cooperation Organization (SCO). Of late, Gulf countries like Saudi Arabia and UAE are taking greater interest in SCO, and there is scope for India to examine cooperation in connectivity projects, and to strengthen economic linkages which involve Iran as well as GCC nations. 

India’s ties with Iran are important not just in the context of bilateral tries but beyond as well. India now can use the Chabahar Project as a means of further enhancing economic links with countries like Saudi Arabia and UAE. A lot will depend upon how India navigates the geopolitical landscape of the Middle East as well as the ever-changing geopolitical situation globally.

[A political and physical map of India, Iran and GCC countries. Originally based on CIA maps]

The views and opinions expressed in this article are those of the author.

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