Challenges, opportunities, and prospects of relations between Tehran and New Delhi

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Apart from the civilizational relations between Iran and India thousands of years ago, the official relations between the two countries were established after the independence of India. 

But the relations between Iran and India have been remarkable in the last decade, and have been maintained in spite of mutual challenges and motivations.

Tehran and New Delhi’s view

The cultural and linguistic closeness of Iran and India lies in a long-term historical relationship. From the point of view of many, Indians and Iranians belong to the same line of descent and spoke a common language at one time.

India with its size, population, military and nuclear power, and membership in BRICS, is important for Iran. India also plays an important role in Iran’s approach to the East.

Tehran considers India to be an important actor in the world arena and wants to have strong bilateral relations with this country.

In the foreign policy of India's ruling party, the economy, energy resources, and areas of economic cooperation have become important. New Delhi sees itself as a pole in the multipolar order.

India seeks to create a balance against other powers, and wishes to play a key international role while maintaining its national interests. Therefore, while joining groups or alliances, it is not willing to ignore its relations with Tehran.

Challenges and obstacles to expanding relationships

The expansion of economic relations and the deepening and development of the strategic partnership between the US and India in the fields of defense, trade, strategy, technology, etc., is currently ongoing despite the tensions between Washington and Tehran.

New Delhi and Tehran have different views about Washington. After the US withdrawal from the JCPOA in May 2018 and the multi-layered US sanctions imposed against Iran, India tried to avoid any widespread damage that could undermine its bilateral relations with Tehran, but the decrease in oil imports from Iran, the poor investments in Chabahar port, and the regression in energy-infrastructure projects have caused criticism in Iran.

India, however, does not agree with the increasing proximity between Iran and China. Apart from this, in the past decade, India has had growing relations with many of Iran's enemies or rivals, such as “Israel”, the UAE, and Saudi Arabia.

In addition, there are still diverging views about Kashmiri Muslims, and religious violence between Muslims and Hindus still affects relations.  The two sides have not yet been able to turn the potential cultural and civilizational capacity into an actual opportunity.

So, the cancellation of the Iranian Foreign Minister's visit to New Delhi was a negative point in relations. The Middle East, however, is a vital source of investment, energy, and remittances of $40 billion annually for India.

Iran's trade with India grew by 48% in 2022, compared with the year before, to stand at $2.5 billion. The balance of trade between the two countries is heavily in favor of India.

Therefore, the reciprocal imports of oil, Iranian fruits, Indian rice and tea are challenges in economic relations. In the economic aspect, Indians' procrastination in joint investments with Iran, non-dollar currency exchanges between the two countries, and the fate of the Iran-India submarine pipeline, are other parts of the speed bumps of economic relations.

Opportunities and future prospects of relations between Tehran and New Delhi

In terms of complementarity between the economies of Iran and India, economic and commercial relations can provide a solid basis for further economic relations in various fields such as trade in goods and services, investment, tourism, large investment training in Makran, etc.

Beijing's strong presence in Iran’s circle causes great concerns in New Delhi. India's competition with China in investment and infrastructure can be an opportunity for New Delhi to return to Iran.

Some reports in India indicate that Iran has proposed a strategic agreement with New Delhi, like the 25-year strategic agreement between Iran and China. In fact, India is looking for a formula to strengthen cooperation and investment in Iran, albeit without American pressure.

India’s rapid economic growth, its poor domestic resources, and its approach of diversification to energy imports, and energy security put great emphasis on the option of Iran's oil and gas energy. 

Tehran's role is very important for New Delhi in the field of increasing India's trade with Central Asia and Eurasia, maintaining the North-South international transportation corridor, countering China's influence in Pakistan's Gwadar, etc.

Cooperation in the form of the International North-South Transport Corridor (INSTC), which connects India to the Caspian Sea, Russia, and Northern Europe through Iran, is strongly considered by both sides. The western, central, and eastern branches of the Corridor (INSTC) pass through Iran. In this regard, India and Iran have accelerated negotiations on a long-term agreement to use the strategic port of Chabahar.

India does not want to abandon Chabahar port, especially since China’s presence has been recently overpowering the region, notably in light of the China-Pakistan Economic Corridor. All this will have a negative impact on the approach of connecting India to Central Asia (Connect Central Asia) and to the North-South International Transport Corridor (INSTC).

It is also important to maintain relations with Tehran to neutralize Pakistan's regional role. India has been facing the challenge of radical Islamism and wider relations to share common interests of the two actors.

Iran and India can have win-win benefits in terms of regional security, especially in Afghanistan. In fact, the strategic views of the two countries can be an important opportunity in many international issues. Multiple opportunities can help both parties to focus on their big interests and ignore their differences. Indian Foreign Minister Subramaniam Jaishankar was the first foreign guest of Iran’s President, Ebrahim Raisi, in July 2021.

Apart from the recent presidential meeting between the President of Iran and Indian Prime Minister Narendra Modi, India's strategic autonomy can also provide support for cooperation. In fact, India does not want to witness the loss of an important strategic partner in the Middle East, and Tehran does not ignore the option of relations with India.

However, the current level of relations is not favorable for both actors, and the major challenges such as American sanctions and the return to the JCPOA are accelerating.

What is clear is that the impact of the current world order on the relations between Iran and India is obvious, but with the elimination of external factors in the relations between the two countries and progress in the JCPOA negotiations, it will be possible to establish better relations between Tehran and Delhi in the future. If JCPOA is revived, it will be much more practical to return to higher levels of relations, especially economic ones.