Roundtable Discussion on India-Iran Relations: Chabahar and Recent Developments in Iran

On 11 June 2024, a Roundtable Discussion on “India-Iran Relations: Chabahar and Recent Developments in Iran” was organised at the Manohar Parrikar Institute for Defence Studies and Analyses (MP-IDSA). The discussion was chaired by the Director General, MP-IDSA, Ambassador Sujan R. Chinoy. The Speakers were Ambassador Yashvardhan Kumar Sinha, former Central Information Commissioner, Ambassador Gaddam Dharmendra, Dean, Sushma Swaraj Institute of Foreign Service (SSIFS), Ministry of External Affairs, and Dr. Deepika Saraswat, Associate Fellow, MP-IDSA.

Executive Summary

The strategic importance of the Chabahar Port is crucial in strengthening India-Iran cooperation and enhancing regional connectivity. The Port’s development is central to India’s endeavors to establish a reliable trade route to Afghanistan and Central Asia. The International North-South Transport Corridor (INSTC), with Chabahar Port as a crucial link, holds immense significance. The recent long-term contract between India’s India Port Global Ltd (IPGL) and Iran’s Ports and Maritime Organisation (PMO) underscores India’s commitment to furthering the port’s development and operations. Despite U.S. sanctions, the Chabahar Port’s operational viability has been facilitated through sanctions waivers, enabling the shipment of essential commodities like wheat and pulses from India to Afghanistan. Iran remains a close regional partner for India, particularly in enhancing connectivity and economic cooperation with Afghanistan and Central Asia.

Detailed Report

Ambassador Sujan R. Chinoy made opening remarks at the roundtable discussion. He provided a comprehensive overview of the close India-Iran bilateral relations, emphasising their importance and evolving dynamics. He highlighted the historical context, noting Iran’s support for India at the United Nations Commission on Human Rights (UNCHR) against Pakistan’s attempt for a resolution on human rights violations.

Amb. Chinoy underscored the significance of the development of the Chabahar Port as a cornerstone of Indo-Iranian cooperation. He referenced the 2016 bilateral agreement worth US$ 85 million for Phase-I development of the Shahid Beheshti Port. A long-term 10-year contract signed in May 2024 between India Port Global Ltd (IPGL) and Iran’s Ports and Maritime Organisation (PMO) was highlighted. This agreement, involving an Indian investment of approximately US$ 120 million, aims to develop further and operate the port, demonstrating India’s commitment to enhancing regional connectivity and economic cooperation.

The importance of the International North-South Transport Corridor (INSTC) was emphasised, with Chabahar Port as a crucial link to Central Asia and Eurasia. Amb. Chinoy illustrated the Port’s operational significance by citing the shipment of 2.5 million tons of wheat and 2,000 tons of pulses from India to Afghanistan, facilitated by U.S. sanctions waivers. He noted that India’s position regarding connectivity with Afghanistan aligns with the U.S. vision. Amb. Chinoy also mentioned the geopolitical implications of the joint naval exercises conducted by Iran, Russia, and China in the Gulf of Oman in the Western Indian Ocean, outlining potential ramifications for India’s critical interests in the region.

Ambassador Yashvardhan Kumar Sinha provided a historical overview of India’s relations with Iran, emphasising the deep-rooted cultural and historical ties between the two nations. Amb. Sinha noted that in 2002 when Iranian President Khatami offered Chabahar port development to India, there were discussions in India of the strategic importance of Chabahar. The progress on India’s involvement in Chabahar gathered momentum in 2011-12. He recalled the then Indian Prime Minister Manmohan Singh’s visit to Iran during the 16th NAM Summit in August 2012, when an action plan on Chabahar was discussed, which later provided the basis for the 2016 Chabahar Agreement.

Amb. Sinha emphasised the significant importance of the Chabahar Port for India, particularly in light of India-Pakistan adversarial relations, which have hindered direct overland connectivity, one exception being India’s wheat shipment to Afghanistan under the World Food Programme going through Karachi. He also elaborated on the financial arrangements between India and Iran, noting that the Reserve Bank of India had an arrangement with the Central Bank of Iran to open Rupee accounts with the UCO Bank, facilitating smoother financial transactions between the two countries.

Amb. Sinha noted that Chabahar is geographically closer to India and Central Asia than Bandar Abbas, making it a more strategic and accessible option for reaching Afghanistan and Central Asia. Additionally, he observed that quick development of transport infrastructure, especially roads linking to Chabahar, has taken place. He also mentioned India’s construction of the Zaranj-Delaram Highway connecting to the Garland Highway in Afghanistan. On a comparative note, he noted that the Baloch insurgency in Pakistan imperils the prospects of Gwadar as a trans-shipment hub. He noted that other partners of India will have the opportunity to utilise this infrastructure, thereby enhancing regional cooperation.

Ambassador Gaddam Dharmendra stated that Iran has been at the centre of multiple developments, especially following the 7 October 2023 attack by Hamas on Israel. He noted that Iran has been linked to various actors, including Hezbollah, Hamas and the Houthis. Additionally, he discussed the role of Egypt and the U.S. in the Israel-Hamas conflict. Amb. Dharmendra provided a detailed overview of the functioning and power dynamics of multiple power structures operating in Iran under the Supreme Leader, specifically emphasising the increasing role of the Islamic Revolutionary Guard Corps (IRGC) in various domains, from politics to economy.

Amb. Dharmendra outlined the recent progress in bilateral relations between Iran and Saudi Arabia, highlighting efforts to bridge long-standing geopolitical divides and China’s role as a guarantor of the process. He elaborated on Iran’s forward defence strategy, which involves using a decentralised network of non-state actors to secure its homeland. Iran has achieved significant success in training and mobilising these actors. However, while Iran has the capability to initiate escalatory dynamics, it lacks the power to dominate such escalations. This was exemplified in the recent attack on Israel, where approximately 300 drones and missiles were launched. Despite this, Iran’s influence remains substantial but not overwhelming in terms of maintaining prolonged dominance in conflict scenarios.

Amb. Dharmendra also discussed the strained relations between Iran and the European Union, particularly in the context of the United States’ withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in 2018. Following this withdrawal, Iran has gradually undermined nearly all provisions of the JCPOA, including dismantling surveillance cameras and limiting access to inspectors, which has resulted in complicated relations with Europe. He also observed that Iran’s nuclear latency acts as a deterrent against potential Israeli strikes on Iran’s nuclear facilities.

Dr. Deepika Saraswat remarked that the 2016 Chabahar Agreement and the latest long-term contract exemplify India’s commitment to maintaining strong ties with Iran, driven by enduring strategic logic. She argued that both countries share a common strategic and security environment in South-West Asia. She noted that Pakistan’s obstructionism gives certain inexorability to Iran’s gateway role. Dr. Saraswat noted that, unlike the United States, India views Iran as a regional partner with which it would seek to engage on the basis of convergence of interests.

Dr. Saraswat noted that despite significant developments in Iran-China relations, particularly after the Iran-China 25-year agreement, India would not like to see Iran fall into China’s geopolitical orbit. She also discussed Mahmoud Ahmadinejad’s administration-led “Look East” doctrine, which emerged in 2005. This doctrine emphasised Iran’s pivot towards the East, diversifying its international partnerships beyond traditional Western allies. Dr. Saraswat underscored Iran’s historical importance in fostering North-South connectivity since the completion of the Trans-Iranian railway in 1938. She specified that under the Look East doctrine, Iran positioned itself as an ‘Asian country,’ prioritising geoeconomic considerations over the conflict-ridden geopolitics of the Middle East.

Dr. Saraswat discussed that Iran’s geopolitical thinking had been shaped by its historical experience in the great game between Britain and Russia, leading to a quest for independence and a nuanced understanding of imperialist geopolitics. Dr. Saraswat emphasised Iran’s self-perception as a regional power, actively engaged in countering the U.S. in the Persian Gulf while also viewing Russia and China as strategic counterweights to the U.S. Iran’s full membership in the Shanghai Cooperation Organisation (SCO) in July 2023 has shown Iran’s approach towards multilateralism. However, she noted that despite these alliances, Iran maintains its identity as a civilisational state and does not consider itself a junior partner to Russia and China. Moreover, Iran is cautious about China’s increasing dominance in Central Asia, a sentiment shared by India as well. She also briefly spoke of the competitive dynamics between Iran and Pakistan in inter-regional connectivity between Central and South Asia.

Comments and Questions

Gp. Capt. (Dr.) Ajey Lele (Retd.), Deputy Director General, MP-IDSA, asked about Iran’s deteriorating economy and its options to navigate challenges. Dr. Ashok K. Behuria, Senior Fellow, MP-IDSA, shared his views on the Baloch rebellion in both Pakistan and Iran and its repercussions. He suggested that India’s anxiety about China-Pakistan nexus needs to be commensurate with India’s broader strategic vision. Dr. Rajiv Nayan, Senior Research Associate, MP-IDSA, remarked on the need to study the technological progress of non-state actors and inquired about the multifaceted role of various authorities in the election of Iran’s new President. Dr. Smruti S. Pattanaik, Research Fellow, MP-IDSA, posed questions regarding sector-specific investments in Iran and the Taliban’s proposal to invest in the Chabahar project. Dr. P. K. Pradhan, Research Fellow, MP-IDSA, asked about evolving bilateral trade amid the potential for closer Iran-Saudi Arabia relations.

All three speakers comprehensively responded to these comments and questions.

Report prepared by Mr. Abhishek Yadav, Research Analyst, West Asia Centre, MP-IDSA.