Experts: India Carving Middle Ground in Iran-US Relation

EghtesadOnline: The prospects of economic cooperation continuing between Iran and India still seem promising, given New Delhi's long-held policy of balancing its relations with Tehran and Washington and a sanctions exemption for the development of Chabahar Port, say political observers.

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22 May 2019

“India is carving out a middle ground approach, as it is willing to buy Iranian crude but at the same time wants to avoid falling foul of US sanctions since its economy is closely intertwined with America's,” Mohsen Roohi-Sefat, a former diplomat, told the Iranian Diplomacy website in a recent interview.

India was Iran's top oil client after China but halted imports after Washington reimposed sanctions on the OPEC producer and later withdrew waivers to eight nations, including India, which had allowed them to import some Iranian oil.

Washington wants to block Iran's oil exports after US President Donald Trump pulled out of the 2015 accord between Tehran and six world powers, under which Iran agreed to curb its nuclear program in exchange for sanctions relief, according to Financial Tribune.

Foreign Minister Mohammed Javad Zarif recently held talks with Indian officials in New Delhi to discuss the most recent developments in the region as well as bilateral ties after India stopped purchasing Iranian oil.

Roohi-Sefat says it seems "unrealistic" of India to completely replace Iranian oil with supplies from Saudi Arabia and the UAE, as "New Delhi is not interested in putting all its eggs in one basket when it comes to oil imports."

It is because India does not want its economy to be negatively affected by any potentially destabilizing incident in the Persian Gulf, or such issues, he added.

The political expert says there is great potential for economic cooperation between Iran and India beyond the oil sector, such as the development of Chabahar Port, which is "crucial" for the South Asian nation.

The US has granted an exception to certain sanctions that allows the India-led development of the port as part of a new transportation corridor designed to boost Afghanistan's economy, according to Reuters.

The exception also permits the construction of a railroad from Chabahar Port to Afghanistan and for shipments to the war-torn country of non-sanctionable goods, like food and medicines.

The sanctions, however, have threatened India's ability to obtain financing for the port’s development, which could potentially open the way for millions of dollars of trade for landlocked Afghanistan and end its dependence on Pakistan's Karachi Port.

Pir-Mohammad Mollazehi, an expert on Indian subcontinent issues, also believes that the development of the port could help maintain economic bonds between Tehran and New Delhi.

This issue could be a "point of focus" for the Iranian diplomatic apparatus, he told the Iranian Diplomacy Website in recent remarks.

He added that history shows India has always adopted a somehow "independent" stance in its foreign policy and is now walking a tightrope between preserving its ties with the Islamic Republic and complying with US sanctions.