Consolidation of relations between Iran and Asian states, especially the emerging powers like India, would mark a new chapter in Iran’s economic cooperation with the outside world.
Given that the world is moving towards multi-polarity in the political, economic and cultural arenas, the Asian countries, in particular, as a cradle of emerging economies are moving towards sustainable economic development.
Thanks to its fastest economic growth, India is considered as one of the possible emerging superpowers of the world. This potential is attributed to several indicators, the primary ones being its demographic trends and a rapidly expanding economy and by GDP India became world's fastest growing economy in 2015 with 7.3% GDP rate.
In an indication of fostering Iranian ties with the regional countries, Asian in particular, Iranian Foreign Minister Mohamamd Javad Zarif, heading a high-ranking political, economic, trade and banking delegation, visited New Delhi on Dec 3 on the first leg of his Asian tour aimed at enhancing relations with India.
While in India, which is considered as his third visit to this Asian country, Zarif attended and delivered a speech in the Ministerial Conference on Afghanistan called 'Heart of Asia' and held talks with several high-ranking Indian officials the ways for fostering mutual cooperation.
The History of Iran-India relations
Tehran and New Delhi have always enjoyed an age-old relations. The two countries established diplomatic relations on 15 March 1950. Following the triumph of the Islamic Revolution in 1979, relations between Iran and India strengthened more. However, Iran's continued support for Pakistan and India's close relations with Iraq during the Iran–Iraq War impeded further development of Indo–Iranian ties.
In the 1990s, India and Iran supported the Northern Alliance in Afghanistan against the Taliban regime. They continue to collaborate in supporting the broad-based anti-Taliban government led by Ashraf Ghani and backed by the United States.
Thanks to its geographical proximity, Iran as the fourth largest owner of gas reserves in the world has always played a pivotal role in addressing India 's energy demands.
In 2011, the US$12 billion annual oil trade between India and Iran was halted due to extensive economic sanctions against Iran, forcing the Indian oil ministry to pay off the debt through a banking system through Turkey.
Call for fostering Iran-India economic relations
Thanks to its economic growth, a population of one billion and 250 million people as well as its lack of reliable sources of energy, India is considered as a lucrative market for Iran and Tehran is keen on improving ties with New Delhi.
Speaking at Iran-India Economic Summit in India, Zarif underscored that economies of Tehran and New Delhi, as largest producers and consumers of energy, complement one another adding that that trade and business relations between the two nations are not limited to oil, gas or energy bonds.
Touching upon Iran’s determination to bolster ties with India, Zarif asserted that Tehran will always remember New Delhi’s cooperation during the tough era of sanction years and develop trade with India.
Marking the country’s southeastern Chabahar port as an excellent venue for bilateral cooperation between the two nations, Zarif underscored that investment in the Iranian free trade zone holds significance for the whole region as it can connect India to Afghanistan, Central Asia, Russia as well as Europe.
Secure Afghanistan vital to Asia prosperity
Addressing the 6th Ministerial Conference of Heart of Asia Process held in India on 4 December 2016, Zarif stressed the country’s full support for the National Unity Government of Afghanistan, saying a secure and stable Afghanistan is vital to the prosperity of the Heart of Asia region.
Describing Iran as a frontline country in the war against narcotics, he added the Islamic Republic has offered alternative cultivation as well as alternative livelihood plans to dissuade Afghan farmers from opium cultivation”, stressing however that an international cooperation is inevitable to "reverse the current alarming trend of increasing drug production".
He further pointed to the trilateral transit agreement between Iran, India and Afghanistan on the development of the port of Chabahar, as one important step in the direction of boosting prosperity in the region.
Iran now India’s top crude oil supplier
As per the latest shipping data on Nov 2016, Iran has overtaken rival Saudi Arabia to become India’s top oil supplier in October.
Before the unjust Western sanctions on Iran over the country’s nuclear program, Iran held the position of India’s second-biggest oil supplier after Saudi Arabia. With the signing of Iran’s nuclear deal in January and the subsequent removal of sanctions, Iran once again reclaimed its level of exports and access to finance.
Shipping data show that Iran’s oil exports to India shot up this year by having sold 759,700 barrels of oil per day to India in October, 56 per cent more than a year ago. This was larger than 717,000 bpd of oil sold by Saudi Arabia, as India’s top oil supplier.
Farzad B gas field
Following the implementation of the comprehensive nuclear deal between Iran and the world powers, an Indian delegation traveled to Iran to discuss the ways for making investment in Farzad B gas field.
Early November 2016, Indian Oil Minister Dharmendra Pradhan announced that his country is ready to make an investment of $20 billion in the development of Iran’s Farzad B gas field in the Persian Gulf, estimated to hold 21.68 trillion cubic feet (tcf) of gas in place, of which 12.8 tcf is recoverable.
Pradhan said Iran and India can swiftly improve their bilateral relations in the oil and gas sectors in the new (post-sanctions) era, adding that New Delhi is keen to invest $20 billion in Chabahar port and in development of the giant Farzad B offshore gas field, which the Indian companies have been in talks with Tehran since 2009 for developing.
A consortium led by New Delhi-based ONGC Videsh discovered Farzad B in the Farsi offshore block, but it abandoned its expansion after the West intensified sanctions on the Islamic Republic in 2012.
Chabahar cooperation agreement
On May 2016, India inked a much-awaited contract with Iran to develop the country’s southeastern Chabahar port – a project which is expected to eventually create a regional trade, investment and transportation hub with links from the Indian Ocean to Central Asia.
According to Press TV, the deal - that has already been described as historic - was signed in a ceremony supervised by Iran’s President Hassan Rouhani and the visiting Indian Prime Minister Narendra Modi. It was sealed between India Ports Global Private Limited (IPGPL) and Iran’s Ports and Maritime Organization (PMO).
Accordingly, the IPGPL will develop two terminals and five multi-cargo berths in Phase-1 of the Chabahar port project. India’s investment in phase-1 will be about $500 million.
From Chabahar port, the existing Iranian road network can link up to Zaranj in Afghanistan, about 883 km from the port. The Zaranj-Delaram road constructed by India in 2009 can give access to Afghanistan's Garland highway, setting up road access to four major cities -- Afghanistan-Herat, Kandahar, Kabul and Mazar-e-Sharif, India’s media reported.
Without doubt, North-South Corridor and the key role of Chabahar port would lead to the development of transit projects and promotion of extensive economic interests for all countries in this region.
The Chabahar agreement is also expected to create a regional trade, investment and transportation hub with links from the Indian Ocean to Central Asia and would mark a new chapter in Iran’s economic cooperation with the outside world, India in particular.