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Published on: July 27, 2020, 12:08 a.m.
Slipshod diplomacy
  • Illustration by Panju Ganguli

By Business India Editorial

Yet another dimension has got added to India’s slipshod diplomacy to counter China. Like in our subcontinent and to some extent in Africa, we have failed to deliver in time on our promises in Iran. This has prompted Iran to cancel out India’s participation in two projects – construction of a 628-km railway link between the provincial capital of Zahedan with Chabahar, where India has built and operationalised a strategic port, and development of the Farzad-B gasfield. India had committed to supplying tracks and rakes for the railway project.

Since steel is not exempted under the US sanctions in force against Iran, New Delhi was waiting for Washington to make a concession which never came. India had also started dragging its feet on the Farzad gasfield, where ONGC Videsh and Indian Oil were to be the lead players, after the sanctions forced  European and Australian consultancy firms to withdraw from their contracts and the State Bank of India also raised concerns. Earlier, India was forced to go along with the US sanctions and stop exporting crude oil from Iran.

India has traditionally been closer to Iran than other west Asian countries because of our civilisational links. Is the Iran fiasco is in some way a failure of our diplomacy? One needs to remember that the Chabahar project was conceived during the BJP-led government of Atal Behari Vajpayee and taken forward by Manmohan Singh.

Even Narendra Modi has visited Teheran in 2016 to lend his support to the project. Thus, both railway project and Farhad gas field are strategic losses for India. The loss is greater because Iran has drifted away from India towards China which has been quick to capitalise upon the situation.

Iran and China view each other as successor states to civilisational empires. Both share a sense of past humiliation in the hands of foreign players.

  • The dramatic entry of China at a time when the world is busy fighting the Covid19 pandemic has caught India unawares

While delay in executing overseas projects is a common complaint against India everywhere (and needs to be rectified urgently), the speculated reasons for Iran easing out India, however, are New Delhi’s visible cosying up to Washington and some of its key allies in the Gulf including Saudi Arabia under the Modi regime, and recent developments in India. Recently, Iran’s spiritual leader Ayatollah Ali Khamenei had tweeted his concern about the Delhi riots and issued a rare criticism of India’s Kashmir policy after New Delhi enacted the J&K Reorganisation Act.

These issues have compounded the difficulties India is facing in doing business with Iran owing to the US sanctions. Now there is a new elephant in the room, China.

Indeed, the dramatic entry of China at a time when the world is busy fighting the Covid19 pandemic has caught India unawares. China and Iran are close to sealing an ambitious $400-billion deal on an economic and security partnership. Alarm bells should have run in New Delhi in 2016, when Chinese President Xi Jinping undertook a high-profile visit to Iran, about the same time as the Modi visit, and the two sides agreed to establish ties based on a Comprehensive Strategic Partnership, kicking off discussions aimed a 25-year bilateral pact. However, such were the delusions surrounding the budding bromance between Prime Minister Narendra Modi and Xi then that the development was swept under the carpet.

Since then, China has moved in to negotiate broader and deeper ties with Iran after the US under the Trump administration walked out of the nuclear deal with Iran in 2018. Today, both China and Iran see the Western Pacific and the Persian Gulf as regions of contestation with the US. It is only know that our foreign office mandarins are poring over the 18-page draft agreement put on the occasion. As per the agreement, China will facilitate the infusion of about $280 billion to buy oil from cash-strapped Iran and invest another $120 billion into Iran’s transport and manufacturing infrastructure.Iran is already a signatory of China’s Belt and Road Initiative.

 What is more alarming for New Delhi is the emerging security and military partnership  between Tehran and  Beijing. The partnership calls for “joint training and exercises, joint research and weapons development and intelligence sharing” to fight “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”. With a growing Chinese presence in Iran, India has reasons to be deeply concerned about its strategic stakes around the Chabahar port project. Nilly willy, India finds itself caught in the geopolitical rivalry between the US and China over Iran. New Delhi will have to extricate itself from this situation sooner than later and retrieve the lost ground in Iran. As it is, our exports to Iran have been falling sharply due to geopolitical tensions. They shouldn’t be allowed to fall further.

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