As India aspires to become a power to reckon with, there exists an imminent need to bridge the foreign policy gap between its politico-strategic and economic priorities. From this standpoint, Iran is an important country in India’s radar screen that deserves far greater attention than it already receives. The takeaways from strengthening multi-level ties with Iran far outweigh the risks and downsides associated with its apparent pariah status in the international geopolitical paradigm. Notwithstanding the persisting yet lopsided notion that Iran is part of the problem, the country aptly fits the bill in serving not only as India’s opportunity but also an integral part of the solution to its foreign policy dilemma.


Energy and connectivity are the buzzwords to a potential upgradation of the hitherto skeletal Indo-Iranian strategic partnership. Geologically, Iran is blessed with massive reserves of oil and gas. Geographically, it is blessed by virtue of being the shortest land-bridge between the resource-rich yet landlocked Eurasian heartland and the crucial maritime trade routes of the Indian Ocean. For India, the Iranian route presents the long-sought bypass to the obstruction posed by Pakistan. Additionally, it offers the best alternative to India’s incurable “South Asia confinement” syndrome – the inevitable product of mostly colonial and partly post-colonial mishandling. Given the circumstances, the International North-South Transport Corridor (INSTC) – India’s ambitious connectivity project through Iran, linking Afghanistan, Central Asia, Russia and eventually Europe – is poised to become the game-changer in the country’s strategic demeanour across its extended neighbourhood. If the INSTC constitutes the arm of India’s revitalised strategic outreach, then Chabahar undoubtedly becomes the elbow. A strong elbow is indispensible to India exercising a better leverage over its arm.


There is ample logic in assuming that China’s Belt and Road Initiative (BRI) brings with it the spectre of economic neo-imperialism in the lesser-developed of the participating countries. Along with the danger of offloading China’s excess manufacturing capacity on these countries, the probability of bad debt accumulation from non-repayable loans cannot be discarded. It is no wonder that several economic pundits continue to express their reservations about the fruition of the seemingly overambitious and cost-consuming China-Pakistan Economic Corridor (CPEC). Being the flagship project under the BRI, with its arterial transit through Pakistan occupied Kashmir (PoK), India’s misgivings about the CPEC are perfectly justified. The fact that it traverses what is rightfully Indian territory, gives India every reason to condemn the CPEC as a blatant violation of its sovereignty. Besides, the functionality of the much-hyped Gwadar port hangs in the balance with the increasing delay in the operationalisation of the CPEC’s more challenging terrestrial leg.


Located less than a hundred kilometres apart on the rugged Makran coast, Chabahar and Gwadar are destined to transform the face of an otherwise neglected Balochistan – an ethnographic region transcending Pakistani and Iranian territory. Both port complexes have been earmarked as Special Economic Zones (SEZs) to facilitate maximum investment towards capacity-building. Nevertheless, there are marked differences between the two ports and their development attributes. For one, the Indian investments and its overall presence in Chabahar are welcomed by the local Baloch people of Iran’s Sistan and Baluchistan province, with hope and optimism. On the other hand, Gwadar is a Chinese enterprise on Pakistan’s Balochistan province – a restive region plagued by a prolonged Baloch insurgency against the Pakistani establishment and its policy of selective repression. The Baloch nationalists resent the CPEC as a product of the Pakistani establishment’s expediency and a harbinger of its gradual sell-out of the resource-rich province to Chinese schemes and vested interests.


In international relations, it is important for a country to market its image and soft power as a precursor to investing in foreign soil. This is where India holds a firm distinct advantage over China vis-à-vis their investments in Chabahar/INSTC and Gwadar/CPEC respectively. Even prior to Iran’s invitation to India to develop the Shahid Beheshti Port in Chabahar, the county of Chabahar had hosted a small Indian community of expatriate workers, most of them employed in the local jewel-making industry. Indian artisans are still the preferred choice in this field of work. The expat labour force largely comprises those fortune-seekers who found the Iranian shores frugally convenient to the hustle-bustle and costly living south of the Persian Gulf. The Baloch in Chabahar share a great bonhomie with the Indian expat community and also with India as well as Indian culture in general. On top of it, the Indian cultural footprint and soft power are widely prevalent and popular among the local Baloch community. Such is not the case on the Pakistani side of Balochistan where the Chinese state machinery and its cultural institutions are trying hard to wriggle their way into the local socio-ethnic fabric. Chinese companies’ insistence on flooding its overseas projects with mostly Chinese workers is also not well received by the local populace.


Interestingly, in the 1970s and 80s, the Makran coast had played host to the Cold War rivalry between the United States and the Soviet Union. It is alleged that Pakistan’s Zulfikar Ali Bhutto had come almost close to signing an agreement with the Soviet Union for developing Gwadar into a Soviet naval base. His eventual execution at the hands of the military government of Zia-ul-Haq had only raised the suspicion of covert American involvement in Pakistan’s internal affairs. To deter a likely Soviet expansion into the Indian Ocean region, the Americans contemplated building a naval base in Iran’s Konarak region, adjoining Chabahar; only to be shelved following the Islamic Revolution of 1979. The Soviets revived their interest in the Makran coast immediately after the invasion of Afghanistan. Connectivity projects were proposed to link Gwadar with Chabahar and expand Soviet military influence as far as the Indian Ocean. This never materialised as the Afghan debacle served as a bellwether to the eventual collapse of the Soviet enterprise and the end of the Cold War.


The void left behind by the Cold War rivalry between the Russians and the Americans was evident in the gross neglect of the Makran region for almost a decade since the end of the Cold War. But cometh the moment and appears China; having calculatedly seized the opportunity in the Pakistani side of Makran. On the contrary, the punitive international sanctions against Iran’s nuclear programme, particularly during President Mahmoud Ahmadinejad’s tenure, detrimentally delayed India’s plans for developing Chabahar by over a decade. However, in India’s case, time lost does not imply that the game is over; on the contrary, things are just beginning to heat up. The landmark nuclear deal between Iran and the world powers and the subsequent slackening of sanctions proved extremely beneficial for expediting Indian investments in Chabahar and the INSTC. Separate visits to Iran over the last one year by the Indian Prime Minister, Petroleum Minister and Shipping Minister speak volumes about the paramount position of Chabahar and the Iranian route in the Indian strategic calculus.


Despite the current US administration’s wrangling and hardball approach towards Iran, there is likely to be a tacit acknowledgement from the former of the role of India’s Afghan-bound corridor as a potential counterweight to China’s BRI. Meanwhile, Hassan Rouhani’s re-election as Iran’s President is the icing on the cake in terms of leveraging the existing momentum in the India-Iran strategic partnership. All said, the Indian government must tenaciously exercise its diplomatic options with Iran as well as the United States, to ensure the hassle-free functioning of its Iran-related transaction channels – be it banking and finance, technology transfer or logistics. This way, the Indian public and private companies can rest assured of sanctions relief and guaranteed returns from Iran-related projects and investments.


The Pakistani establishment’s subservience to China’s financial might may have given the latter some leeway in terms of precluding the kind of bureaucratic hurdles that hinder Indian investments with respect to Chabahar. However, this does not mean that the CPEC is a walk in the park for China. Apart from the security concerns in Balochistan, the ability to finance the remaining leg of the megaproject remains uncertain. This is due to the increasing liabilities borne by Chinese banks that are forced to generously lend money to the Chinese state-owned companies, at fixed base rates.


Not able to replicate China’s “steroid-induced” expansion should not bother India, for what is important is a long-term strategy that ensures stability and the capacity to absorb shocks. After all, Chabahar is India’s elbow – and one cannot ignore the elbow while flexing the arm.


Disclaimer: The views expressed in this article are personal.