India-Iran Co-operation

India-Iran Co-operation

India has always enjoyed a strong relationship with Iran, even during the sanctions era, both countries have consistently maintain foreign policies, without becoming the appendages of any other state

The removal of sanctions on Iran has opened up new vistas for foreign investors. With the recent back-to-back visits to Iran by India’s Minister of State for Petroleum and Natural Gas Dharmendra Pradhan on April 9 and 10 and External Affairs Minister Sushma Swaraj on April 16 and 17, India has sent a clear message: It wants to strengthen economic ties with Tehran and take advantage of the changing geo-political situation. Yet India has always enjoyed a strong relationship with Iran, even during the sanctions era. First, both India and Iran have consistently sought to maintain independent foreign policies, without becoming the appendages of any other state. And so after U.S. sanctions were imposed in 2012, then Indian Prime Minister Dr. Mainmohan Singh made it a point to attend the NAM Summit in Tehran, much to the chagrin of the West. Moreover, the economic relationship between India and Iran has been reasonably stable, even under sanctions. This relationship is likely to be bolstered by the recent visits of Pradhan and Swaraj, which were not only designed to enhance energy cooperation and accelerate the development of Chabahar Port, but also to conclude pending agreements on preferential trade, taxation and bilateral investment, all essential for stronger economic cooperation.

External Affairs Minister Visit

India External Affairs Minister Smt Sushma Swaraj visited Tehran on April 16-17 at the invitation of her counterpart Dr. Javad Zarif, Minister of Foreign Affairs of Iran. EAM called on Hon’ble President of Iran Dr. Hassan Rouhani, met Dr. Ali Akbar Velayati, Advisor to Supreme Leader and held delegation level talks with Javad Zarif. In her cordial and forward-looking discussions with Iranian dignitaries, EAM highlighted the long-standing civilizational ties between the two countries. She stressed the desire of India to expand all-round cooperation with Iran particularly in energy, connectivity, ports, infrastructure, trade and culture. She expressed the hope that the two sides will sign at an early opportunity the bilateral contract on Chabahar Port, and also the trilateral Agreement involving India, Iran and Afghanistan on Trade and Transit Corridor through the Chabahar port. Iran supported India’s desire to join the Ashgabat Agreement. Both sides highlighted the importance of International North South Transport Corridor. The Iranian side welcomed the prospects for participation of India in railway projects, such as Chabahar – Zahedan, which will enhance regional connectivity.
India welcomed the outcome in cooperation in energy sector from the recent visit of Minister of State (IC) Petroleum and Natural Gas to Iran, including the exploration and development of Farzad B and participation of India in setting up fertilizer projects. The concerned companies have been directed to complete their contractual negotiations on Farzad B in a time bound manner. Iranian side had earlier communicated their gas pricing formula and welcomed Indian investment in the Chabahar SEZ. EAM also emphasized the need for early finalization of trade related agreements including on Double Taxation Avoidance Agreement, Bilateral Investment Protection And Promotion Agreement and an early launch of negotiations on Preferential trade Agreement. She conveyed that India was ready to repatriate the oil payments to Iran through the mutually workable banking channels as per the understanding reached between the relevant authorities of the two countries.

Both sides took note of the good cooperation between the National Security Council structures of the two countries and agreed to intensify this engagement. Given the civilizational links between India and Iran, both sides agreed to promote and strengthen the existing cultural exchanges, inter-alia, by observing Weeks of Iran and India in each other’s country, publication of manuscripts, organizing conferences and events related to language, literature and religion. They also agreed to positively consider the establishment of a Hindi Chair in Tehran University sponsored by ICCR and to renew the Cultural Exchange Programme. Both leaders expressed satisfaction at the recent exchange of visits and called for more high level exchanges to give fresh impetus to India Iran relations. The Iranian side assured all cooperation in addressing a few specific matters of interest to the Indian community staying in Iran and the difficulties faced by Indian seafarers working in Iran. EAM had earlier in the day met members of the Indian community in Iran and attended an event at the Kendriya Vidyalaya. The two ministers also reviewed global and regional issues, in particular the situation in Afghanistan. India has been eying deeper energy ties with Iran following lifting of nuclear sanctions and has already lined up USD 20 billion as investment in oil and gas as well as in petrochemical and fertiliser sectors there. India is also keen to increase oil imports from Iran from current 350,000 barrels a day. The size of Iran’s economy is around USD 400 billion, the second largest in the Middle East after Saudi Arabia, and the country is being seen as one of the world’s hottest investment destinations as it has opened various critical sectors including oil and gas for joint ventures and foreign capital. Countries like. Japan, China, the US and a number of European nations are scrambling to take advantage of opportunities in the oil-rich nation after the sanctions were lifted in January.

Both sides decided to enhance cooperation in counter-terrorism and maritime security as they agreed that concerted global effort was required to combat the menace. They reviewed bilateral relations, in particular the progress in implementing the decisions taken at the last Joint Commission Meeting held in New Delhi in December 2015. Both sides took note of the good cooperation between the National Security Council structures of the two countries and agreed to intensify this engagement. In terms of cultural cooperation, both sides agreed to promote and strengthen the existing cultural exchanges, inter-alia, by observing “Weeks of Iran and India” in each other’s country, publication of manuscripts, organizing conferences and events related to language, literature and religion. They also agreed on the establishment of a Hindi Chair in Tehran University sponsored by ICCR and to renew the Cultural Exchange Programme.

Iran and India Expand Cooperation

In March, the cabinet of Prime Minister Modi gave its approval for India to accept to the Ashgabat Agreement, which facilitates the transportation of goods between Central Asia and the Persian Gulf. India is working to participate in the International North South Transport Corridor (INSTC) which is the route for moving freight between India, Russia, Iran, Europe and Central Asia. India’s investment at the Chabahar port in Iran- potentially amounting to , $20 billion—is another expanding arena for cooperataon. Both countries also need each other to ensure a stabilizing impact in Afghanistan through investment and other means. Continuing tensions between Iran and Saudi Arabia and the subsequent deteriorating security situation challenge India’s interests. Saudi-Iran tension and its impact in Yemen have forced India to evacuate thousands of its citizens from Yemen. Therefore, it is in India’s interest to maintain an effective balance between the two countries, and both countries seem to understand that.

Chabahar Agreement

India, Iran, and Afghanistan have finalized the parameters of a trilateral agreement known as the Chabahar Agreement, which will allow India access to Afghanistan via the strategically located Iranian port of Chabahar, which sits on the Gulf of Oman. The Chabahar route to Afghanistan will allow Indian goods to reach Afghanistan without having to first bypass Pakistan, which has a limited trade relationship with New Delhi due to diplomatic tensions and a territorial dispute between the two countries.India and Iran had first broached the idea of Indian access to Chabahar in 2003, when they agreed to jointly develop the port. In part due to increased Western sanctions against Iran over its nuclear program and India’s rapprochement with the United States following the landmark 2005 framework between the two countries, the development of Chabahar stagnated on the India-Iran agenda. Last year, in May 2015, two months before world powers and Iran announced the Joint Comprehensive Plan of Action on Iran’s nuclear program, Indian Transportation Minister Nitin Gadkari visited Iran to sign a memorandum of understanding on Chabahar. Last week, ahead of Swaraj’s visit to Iran, representatives from Iran, Afghanistan, and India met in New Delhi to finalize a draft of the Chabahar agreement.The finalization of the Chabahar agreement is not only an important development in the India-Iran relationship, but it also shows that New Delhi is serious on delivering on its commitments in Afghanistan. In December 2015, when Indian Prime Minister Narendra Modi visited Afghanistan, he and Afghan President Ashraf Ghani discussed Chabahar and urged a conclusion of a final agreement.The increase in connectivity afforded by the port could allow Afghan exports cheaper access to markets in India. Currently, an overwhelming amount of Afghan manufactured goods travel through Karachi, Pakistan. In February 2016, Afghan officials said that Afghan exports through Karachi had declined 40 percent amid political tensions between Kabul and Islamabad.

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