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Iran: India Deepens Strategic Partnership

  • Charles Recknagel

India's Prime Minister Atal Bihari Vajpayee today wraps up a four-day visit to Tehran to boost economic and political ties. RFE/RL correspondent Charles Recknagel looks at how the two countries have moved closer in recent decades as both want a pipeline to deliver Iranian gas to India and both oppose Pakistan's continued backing of the Taliban.

Prague, 13 April 2001 (RFE/RL) -- Since arriving 10 April as the first Indian prime minister to visit Iran since 1993, Atal Bihari Vajpayee has kept up a fast pace of official meetings to strengthen the two countries' ties.

On the economic front, India and Iran signed six agreements to boost cooperation in energy and other fields. Iranian state media did not say whether the two sides finalized plans to lay a pipeline to transfer Iranian natural gas to India. But the cooperation accords underscored their continuing interest in finding ways to increase Iran's role as an energy supplier to the growing Indian market.

On the political front, Vajpayee emphasized commonalities in the countries' foreign policies. He stressed New Delhi's antipathy for Afghanistan's ruling Taliban, which Iran regards as a highly undesirable neighbor. And Vajpayee and Iranian Foreign Minister Kamal Kharazi blamed Pakistan for not encouraging Afghanistan's warring groups to negotiate. Pakistan recognizes the Taliban but denies providing it military support.

Analysts say the Indian head of government's visit is part of a recent drive by New Delhi to build up ties to regional countries which can supply it with energy. India's energy needs are growing dramatically, with gas import dependency expected to jump from a current 53 percent today to 91 percent by 2025. India's oil import dependency is expected to reach 78 percent in the same period.

Teresita Schaffer, an expert on South Asian affairs at the Center for Strategic and International Studies in Washington, says India regards Iran as both an abundant source of energy and a strategic partner.

Schaffer says 10 years ago, India mainly looked to the Middle East for its regional alliances. But since the end of the Cold War that has changed. Teresita Schaffer:

"What has happened in the last 10 years is that [India's] relations with Arab countries have to some extent shifted focus. In the heady days of non-alignment, the biggest [of India's regional partners] was Egypt and the other important relationship was Iraq, which got along quite badly with the Pakistanis."

But the post-Cold War decade has seen Indian-Egyptian ties diminish for lack of economic incentives to sustain them. And since 1990, Iraq has been isolated by international sanctions -- despite New Delhi's desire to now see them lifted. That has prompted India to turn its attention increasingly to the Gulf states and Iran. Schaffer says:

"Where India is working a lot harder [now] is with the countries from whom they import significant amounts of oil and gas: Saudi Arabia, Iran, and some of the smaller Gulf countries. And the political [tie-building] is intended to reinforce the economy."

Schaffer says the rise of Afghanistan's Taliban -- which formed in 1994 -- has provided strong political cement for the growing Iranian-Indian economic relationship.

"The interesting change that has come about is in part the product of bad relations between Iran and Pakistan, which in turn is heavily the result of what has been going on in Afghanistan. [The Iranians] have seen Pakistan as the party responsible for a lot of this trouble and India has tried to take advantage of these worsening relationships."

Tehran regards the rise of militant Sunni Islam -- as exemplified by the Taliban -- as a regional threat and has supported the anti-Taliban opposition to bolster Afghanistan's Shiite minority. At the same time, New Delhi blames Pakistan for fanning a secessionist struggle in India's majority-Muslim province of Kashmir.

This week saw Vajpayee speak several times about the two countries' shared regional concern over Pakistan. Without naming Islamabad directly, the Indian official called on "neighboring states to abandon the path of violence."

Such shared values contrast with the much cooler relations New Delhi and Tehran enjoyed in earlier decades -- notably during the 1965 Indian-Pakistani war when Tehran allowed Pakistan to send planes and ships to Iranian havens. And they may strike a discordant note in what remain generally good Iranian economic relations with Pakistan.

But analysts say so long as the Taliban continue to worry Iran, the Indian-Iranian strategic partnership is only likely to grow stronger.

The problem that New Delhi and Tehran now face is how to physically move large amounts of energy from Iran to India, as both sides want. A joint Indian-Iranian committee has been looking at various options, including an overland or a deep-sea pipeline.

But both options are challenging. An overland pipeline -- estimated to cost $3 billion -- would have to pass through Pakistan. That raises security issues for India, which has fought three wars with Pakistan since the countries won independence in 1947. And while a deep sea pipeline would be politically easier, it would also be an estimated 10 times more costly.

That could leave Tehran having to use ships to transport liquefied natural gas (LNG) to India instead -- a situation which puts Iran at the risk of strong competition from the Arab Gulf states.

Mojgan Djamarani, an oil expert with the Institute of Petroleum in London, says several of the Gulf LNG producers already have a significant head start over Iran in the Indian market:

"Qatar and Oman already have long-term supply contracts with India and they are ahead of Iran in terms of having LNG plants in place and they are planning to expand capacity further. Iran plans to build its [export] LNG plant to coincide with phases 11 and 12 of the South Pars field in the Gulf and those phases 11 and 12 would be about four or five years from now."

Iran, India, and Pakistan could yet find a way to ease the Indian-Pakistani rivalry sufficiently to participate in an overland pipeline. Pakistani officials estimate a pipeline could earn Pakistan $500 million in transit fees annually as well as help Pakistan meet its own projected future energy shortages. Islamabad has said it is ready to guarantee the route's security.

There are some precedents for India and Pakistan cooperating together which could boost the chances for the pipeline's success. One is a water-sharing agreement between New Delhi and Islamabad. Teresita Schaffer says:

"The most successful India-Pakistan agreement dates back to 1960. It was the Indus waters treaty which divided the waters of the Indus and its tributaries among India and Pakistan and the water-flow has never been interrupted."

Proponents of the pipeline say the presence of multinational investors in any construction also would help to guarantee its security by making all players view it in international, rather than strictly national, terms.

Currently, Iran's exports to India -- mainly shipments of crude oil -- are worth some $1 billion a year. Iran last year imported some $165 million worth of goods from India, mainly iron ore, chemicals, and textiles.