Question – India and Iran need to rebuild their ties affected adversely by recent global events.
Answer: India and Iran enjoy good ties, which is mostly shaped around energy, Central Asia and security (mostly around Pakistan-Afghanistan region). The economic ties between India and Iran were enhanced following the opening of India’s economy in the early 1990s.
Iran and India commercial ties
- India’s imports from Iran are dominated by crude oil, accounting for 85.9% of India’s total imports from Iran. In 2014, India was the second-largest market for Iran’s exports of crude oil.
- However, the US sanctions on Iran led to a decrease in trade to a historic low. India has steadily cut imports from Iran as sanctions from the US and other Western countries blocked payment channels and crippled shipment routes.
- Iran has borders with a large number of countries that India could not access because of the barrier that Pakistan posed to India’s overland connectivity plans.
- India’s relationship with Iran has been built carefully and thoughtfully by all past governments as Iran for India is not just an energy supplier from the Persian Gulf region.
- India’s infrastructure-building activities in Afghanistan are done with support from Iran.
- India has disregarded the political inclination of the government in Tehran with an eye on the overall necessity of the country for India’s strategic security.
- To meet the ever-growing energy demand and sustain the economic growth rate, India needs to plan the sources of energy supply. Iran is one of the countries that can meet these needs as it is close to India and has ample energy resources.
- Apart from energy, India’s economic interests in Iran also include connectivity to Afghanistan and Central Asia.
Thus, as an emerging power, India cannot remain confined to South Asia and a peaceful extended neighborhood (Iran-Afghanistan) is not only good for trade and energy security but also plays a vital role in India’s aspirations of becoming a superpower.
Tags: GS 2 (International relations)
By – Prashant Tiwari