BRICS & India-Iran Ties

Syllabus: GS2/International Relations; Global Groupings Affecting India’s Interests

Context

• On the sidelines of the 16th BRICS Summit, held in Kazan, Russia, India and Iran held a crucial bilateral meeting, highlighting the untapped potential in their partnership, which have been historically rich but faced stagnation in recent years.

Iran and BRICS – The inclusion of Iran in the BRICS group was formalised at the 16th BRICS Summit in Kazan, Russia, underscores the group’s commitment to fostering a multipolar world order. – Iran’s entry into BRICS is a strategic move that benefits both Iran and the existing BRICS members. For Iran – It provides a platform to counterbalance Western economic sanctions and integrate more deeply into the global economy.  1. It opens up new avenues for trade, investment, and technological cooperation with some of the world’s largest emerging economies. – The BRICS New Development Bank (NDB) can play a crucial role in financing infrastructure and development projects in Iran, further strengthening economic ties. For BRICS – It enhances the group’s influence in the Middle East, a region of critical geopolitical importance.  – Iran’s vast reserves of crude oil and natural gas, along with its strategic location, make it a valuable partner for energy security and trade routes.

India-Iran Relationship: Historical Context

• The relationship between India and Iran is a complex and multifaceted one, deeply rooted in historical, cultural, and strategic ties, and they share a rich history of cultural and civilizational exchanges dating back to ancient times.
• The Persian influence on Indian art, architecture, and language is well-documented, and the two countries have historically been connected through trade routes and cultural exchanges.
• Over the years, both nations have navigated various global and regional challenges to maintain and strengthen their bilateral relations.

Political Relations

• 1950: Signing of the India-Iran Friendship Treaty.
• 2001: Prime Minister Atal Bihari Vajpayee’s visit to Iran and the signing of the Tehran Declaration.
• 2003: President Seyyed Mohammad Khatami’s visit to India and the signing of the New Delhi Declaration.
• 2016: Prime Minister Narendra Modi’s visit to Iran, resulting in the signing of 12 MOUs/Agreements, including the Trilateral Agreement on Trade, Transport, and Transit between India, Iran, and Afghanistan.
• 2018: President Hassan Rouhani’s visit to India, during which 13 MOUs/Agreements were signed, focusing on areas such as health, medicine, and the interim operations of Chabahar Port.

Economic and Trade Relations

• In the fiscal year 2022-23, bilateral trade reached $2.33 billion, with India’s exports to Iran amounting to $1.66 billion and imports from Iran totaling $672.12 million.

Strategic and Security Cooperation

• India and Iran have established several bilateral consultative mechanisms to enhance cooperation in various domains, including:
  • Joint Committee Meetings (JCM)
  • Foreign Office Consultations (FOC)
  • Security Consultations at the level of National Security Advisers
  • Joint Consular Committee Meetings (JCCM)
• These mechanisms facilitate regular dialogue on strategic and security issues, contributing to regional stability and mutual interests.

Strengthening India-Iran Bilateral Relations

• Both India and Iran acknowledged the strong historical and civilisational ties between their countries and emphasised the need to strengthen cooperation in various sectors. 
• They discussed, on the sidelines of the 16th BRICS Summit, key areas such as energy, trade, and connectivity, with a particular focus on the Chabahar Port and the International North-South Transport Corridor (INSTC).

Energy Cooperation

• Energy cooperation remains a cornerstone of India-Iran relations. Before 2019, Iran supplied nearly 12% of India’s crude oil needs. Despite economic sanctions and regional conflicts, Iran’s crude oil production and exports have shown resilience.
  • Iran’s crude production in May 2024 rose to 3.4 million barrels per day, highlighting its capacity to meet India’s energy demands.
• The potential for renewed energy ties was a significant topic of discussion, with both leaders exploring ways to enhance this cooperation.

Strategic Connectivity Projects

• The Chabahar Port, a vital link for India’s trade with Central Asia and beyond, was a focal point of the discussions. The port provides India with a crucial alternative route, bypassing the Strait of Hormuz and ensuring uninterrupted trade even during regional conflicts.
• In May 2024, India and Iran signed a 10-year contract for the operation of the port, underscoring its strategic importance. 
• Additionally, the development of a 700 km railway link between Chabahar and Zahedan, and further connectivity to Afghanistan, was highlighted.
  • These projects are expected to bolster trade and humanitarian aid routes, enhancing regional stability and economic integration.

Regional Stability and Peace

• Given the ongoing conflict in Gaza, Iran sought India’s support in de-escalating the crisis. India, known for its balanced diplomatic approach, has been advocating for a ceasefire and peaceful resolution. 
• The BRICS summit provided a platform for both countries to discuss their roles in promoting regional stability and peace.

Concerns and Challenges in India-Iran Relationship

• Sanctions and Economic Constraints: The re-imposition of U.S. sanctions on Iran has significantly impacted India-Iran trade relations.
  • These sanctions have restricted India’s ability to import Iranian oil, which was a major component of their bilateral trade. 
  • The economic constraints have also affected other sectors, including pharmaceuticals and infrastructure projects like the Chabahar Port.
• Geopolitical Tensions: The geopolitical landscape in West Asia, particularly the tensions between Iran and other regional powers like Saudi Arabia and Israel, complicates India’s diplomatic balancing act.
  • India’s strategic partnerships with these countries require careful navigation to avoid conflicts of interest.
• Security Concerns: Security issues, including terrorism and regional instability, pose significant challenges.
  • The situation in Afghanistan, where both India and Iran have vested interests, adds another layer of complexity.
  • Cooperation in counter-terrorism efforts is crucial but challenging due to differing regional priorities and alliances.
• Connectivity Projects: While projects like the Chabahar Port and the INSTC are pivotal for enhancing connectivity and trade, they face logistical, financial, and political hurdles.
  • Ensuring the timely completion and operational efficiency of these projects remains a significant challenge.
• Energy Dependence: India’s energy dependence on Iran has been a double-edged sword. While Iran’s vast reserves of crude oil and natural gas are crucial for India’s energy security, the volatility in the region and sanctions have made this dependence risky.
  • Diversifying energy sources while maintaining strategic ties with Iran is a delicate balance.

Conclusion and Way Forward

• The India-Iran relationship is a testament to the enduring ties between two ancient civilizations. 
• The BRICS Summit has undoubtedly provided a significant boost to India-Iran ties. By focusing on strategic projects, energy cooperation, and regional stability, both nations have laid the groundwork for a stronger and more resilient partnership. 
• As India continues to play a pivotal role in global diplomacy, its relationship with Iran will be crucial in shaping the geopolitical landscape of West Asia.

Daily Mains Practice Question [Q] To what extent has the recent BRICS summit strengthened the bilateral relationship between India and Iran? Discuss the potential implications of this strengthened partnership on regional geopolitics and global energy markets.

Source: TH