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Context: The recent visit of Iran's deputy foreign minister for political affairs, Ali Bagheri Kani, to New Delhi manifested a new chapter of relations between the traditional allies, India and Iran.

Relevance: Prelims- Current Affairs of National and International Importance.
Mains- GS-2, India and Its Neighbourhood Relations, Bilateral, regional and global groupings and agreements involving India and/or affecting the Indian interests, Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

India- Iran Relations

Introduction:

• India-Iran relations span millennia marked by meaningful interactions.
• The relations between India and Iran go back to the ancient civilizations of the Indus valley and Mesopotamia. There was trade between the coast of southern Iran and India through the Persian Gulf and the Arabian Sea. Some Indus seals have been excavated at Kish, Susa, and Ur in Iran.
• The Harappan people are believed to have imported silver, copper, turquoise, and lapis lazuli from Persia and Afghanistan. Iran supplied silver, gold, lead, zinc, and turquoise to ancient India. Ivory was imported from India.
• The two countries shared a border till 1947 and share several common features in their language, culture, and traditions.
• Both South Asia and the Persian Gulf have strong commercial, energy, cultural and people-to-people links. 

Strategic Importance of Iran for India:

•  Iran is located at a strategic and crucial geographical location between the Persian Gulf and the Caspian Sea.
• Iran is important to India as it provides an alternate route of connectivity to Afghanistan and Central Asian republics, in the absence of permission for India to use the land route through Pakistan.
•  It sits on one of the largest deposits of crude oil and natural gas in the world.

Political Relations:

• Independent India and Iran established diplomatic links on 15 March 1950.
• The Shah visited India in February/March 1956 and Prime Minister Pandit Jawaharlal Nehru visited Iran in September 1959.
• In   1953, Iran was ruled under Shah Mohammad Reza Pahlavi.
• During much of the Cold War period, relations between India and Iran suffered due to different political interests, primarily due to the non-aligned tactic of India towards the US, which enjoyed close ties with Iran. Also, India was leaning more toward USSR, especially after the conclusion of the Treaty Of Peace and Friendship in 1971.
• The Iranian Revolution in 1979 introduced a new phase of engagement between India and Iran marked by the exchange of high-level visits.
• After Cold War, relations have been improving.
• Iran and India closely cooperated in supporting the Northern Alliance in Afghanistan against the Taliban in the 1990s.
• Iran has emerged as India’s most viable transit option for trade with Central Asia and Russia. India, Russia, and Iran signed an agreement in 2000 for sending Indian Cargo to Russia via Iran through a ‘North-South Corridor’.
• But in 2006, India voted against Iran over its clandestine nuclear program at International Atomic Energy Agency. Due to US pressure India slashed Oil imports by 40 percent and backed off from a pipeline project bringing gas via Pakistan.
• This was a huge setback to India-Iran relations.
• However, relations were back on track in 2008 when Iranian President Mahmoud Ahmadinejad came to India, and India promised an independent policy towards Iran and did not yield to US pressure.
• India has worked hard to maintain its ties with Iran when there were international sanctions on Iran from all sides. 

Economic and Commercial Relations:

•  India-Iran commercial ties were traditionally dominated by the Indian import of Iranian crude oil. In 2018-19 India imported US$ 12.11 bn worth of crude oil from Iran.
• However, following the end of the Significant Reduction Exemption (SRE) period on 2 May 2019, India has suspended importing crude from Iran.
• The bilateral trade during 2019-20 was $4.77 billion, a decrease of 71.99% as compared to the trade of $17.03 billion in 2018-19.
• What is significant is that Indian exports to Iran between 2011-12 and 2019-20 have grown by 45.60%.
• India’s major exports to Iran include rice, tea, sugar, soya, medicines/pharmaceuticals, man-made staple fibers, electrical machinery, etc.
• Major imports from Iran include inorganic/organic chemicals, fertilizers, cement clinkers, fruits and nuts, leather, etc.
• Both countries are negotiating a Preferential Trade Agreement, on which five rounds of talks on have been held so far.
• The Embassy of India has been at the forefront of promoting economic and commercial relations between India and Iran.
• The Embassy of India organized three events titled ‘Potential for expanding India-Iran trade’ to promote bilateral trade.
• The Embassy has also facilitated visits of Indian business delegations, and participation of Indian companies in Iranian exhibitions. 
• Considering the importance of India-Iran economic and commercial relations, two Indian banks, State Bank of India and UCO Bank, have their representative offices in Iran. 

Connectivity:

• India is developing the 1st Phase of Shahid Beheshti Port at Chabahar. The capacity of the port will reach 8.5 MT at the end of the first phase.
• The Trilateral Transit Agreement (Chabahar Agreement) was signed by the three transport ministers of India, Iran, and Afghanistan in the presence of Prime Minister Shri Narendra Modi, President Dr. Rouhani, and President Ashraf Ghani in May 2016.
• International North-South Corridor which is a ship, rail, and road route for moving freight between India, Russia, Iran, Europe, and Central Asia and aims to provide the shortest multi-model transportation route linking the Indian Ocean and the Persian Gulf to the Caspian Sea via Iran and St Petersburg.

Humanitarian Assistance: 

• India has also helped Iran in times of natural disasters and health emergencies.
• India delivered aid that included PPE kits and PCR machines to Iran in April 2020 during the COVID-19 crisis.
• In 2019, India provided 103 tonnes of aid to Iran during the floods that ravaged the country.
• In June 2020, India supplied Malathion pesticide to Iran to fight the menace of desert locusts.

Cultural Relations:

• Swami Vivekananda Centre in Iran organizes music/cultural/literary programs/ seminars on cultural/literary issues related to India and Iran on a regular basis.
• Cultural ties are also given momentum via important visits.

Indian Community in Iran:

• The Indian community in Iran comprises around 5000 Indian nationals.
• There is also a substantial number of Indian fishermen, seafarers, workers, university students, and professionals in Iran. 

People-to-People Contacts:

• There is a high-level commitment in both countries to promote and facilitate people-to-people contact.
• Indian pilgrims visit the Shia pilgrimage circuit in Iran (Qom, Mashhad, Hamedan) and Iraq (Najaf and Karbala) every year.
• In 2020, more than 1100 Indian pilgrims visited Iran.
• Annually, more than 20,000 Iranian tourists visit India, with Delhi-Agra-Jaipur, Mumbai-Pune-Goa, and Hyderabad being the most preferred destinations.
• A large number of Iranian students pursue higher studies in medicine, pharma, engineering, humanities and other courses in India. 

Terrorism/Security:

• India and Iran both face the threat of terrorism by outfits like Al-Qaeda and Islamic State. Hence, there is a need for cooperation on this issue.

Issues in India- Iran Ties:

• The stoppage of oil imports from Iran after May 2019 owing to U.S. sanctions(CAATA) following the revocation of the Iran nuclear deal, therefore, impacting India’s energy security.
• India’s close relations with Israel, and Iran’s ties with China, including signing a 25-year strategic partnership agreement.
• Iran-backed Houthis in Yemen launching drone attacks against Saudi Arabia and UAE, both are close partners of India.
• Iran’s tough statement on the Indian government’s abrogation of Article 370 of the Indian Constitution, gave special status to Kashmir.
•  India’s ONGC Videsh Limited played a crucial role in discovering the potential of Farzad B gas fields in Iran in 2008. Despite 10 years of discovery, Iran has not given the rights to develop the gas field to ONGC Videsh Limited. Rather it has signed an initial pact with  Russia’s Gazprom for the purpose.
• Although India has abstained from voting on a UNHRC resolution that was related to a fact-finding mission to investigate the alleged Human Rights violation after the death of 22-year-old Mahsa Amini. But the ongoing upheaval in Iran might create problems.

Possible Areas of Convergence for India and Iran:

• Afghanistan:
  • The Taliban government has largely been isolated since it took over Kabul in August 2021.
  • Iran was one of the few countries that did not withdraw its embassy from Kabul and has continued to keep its channels of communication open with the Taliban.
  • India is now keen to open back its embassy in Kabul and recently started negotiations with the Taliban.
  • India and Iran have the potential to forge a common and effective policy of engagement with Afghanistan in the future.
• West Asia:
  • There is rebalancing taking shape in the West Asian region which offers great potential to strengthen India-Iran ties.
  • For a long time, India’s growing ties with the Gulf countries, especially Saudi Arabia and the UAE were seen as a “zero-sum game” pitted against their rivalry with Iran.
  • The UAE and Qatar recently held good talks with Iran. The Iranian President has already visited Qatar and Oman this year.
  • Syria and Iraq are slowly consolidating and are positively disposed toward Iran.
  • The Abraham Accords signed with Israel give hope for the acceptance of Israel by the regional countries as a potential partner and not necessarily a foe.
  • All these developments work well for India, as it has close and good relations with the Gulf countries, Iran, and Israel.
  • This gives India the tremendous opportunity to develop and scale up its cooperation with Iran without fear of losing out on other friends in the region.
  • In fact, at some point in time, India may emerge as the perfect interlocutor in the region, as it has the trust and confidence of all stakeholders.
• Way Forward:
  • There is a need to look forward toward areas of convergence, where both countries have a mutual understanding of each other’s common interests and further work together to achieve the same.
  • India and Iran, therefore, have a lot that can be achieved together.
  • The assertive diplomacy being practiced by India, emphasizing standing by its neighbors and friends and focusing solely on fulfilling its national interests, is a refreshing change.
  • If India can extend the same vision toward its engagement with Iran, it could open a huge potential for cooperation between these two great nations and civilizations.
  • Time is therefore ripe for a reset.