Iran poses a trilemma for India: first, how to maintain and sustain economic and political ties with Tehran without jeopardizing similar relations with its Gulf Arab neighbours and Israel, not to mention the US. Second, how to build a reliable partnership particularly on Afghanistan, despite Tehran’s reticence to invest in developing Chabahar (a crucial entrepôt for the Zaranj-Delaram route). Third, how to curb Tehran’s possible nuclear weapon ambitions—without having to support either additional sanctions or, worse, military action—which would also boost New Delhi’s non-proliferation credentials and prospects for membership of the Nuclear Suppliers Group (NSG). The recently concluded dialogue between the head of Iran’s Supreme National Security Council, Saeed Jalili and India’s National Security Adviser, Shivshankar Menon, underlines the formidable challenge for New Delhi in addressing even one of these, let alone all of them.
On the economic front, India’s move to reduce its oil import from Iran and increase it from other sources, especially Saudi Arabia, has two consequences. First, a possible rise in its oil import bill. According to one estimate, a $10 increase in oil price (a likely fallout of sanctions on Iran’s oil sector) will reduce India’s gross domestic product (GDP) growth by 0.2%, a critical dip given the present slowdown. Second, this increased dependence on Saudi oil leaves India open to political pressure from Riyadh, as was evident in its shifting vote on Syria. In the long term, it would be imperative for India to keep its oil and gas supplies as diversified as possible so as to maintain its autonomy of action.
On Afghanistan, Jalili’s usual rhetoric that Iran would align its interests with India is not borne out in practice. Tehran’s decade-long overdue go-ahead for the development of Chabahar came with the caveat that it would expect New Delhi to foot the bill for infrastructure development there. While India, Iran and Afghanistan recently set up a working group to expedite the project, progress is likely only if the necessary investment is forthcoming. The Indian government’s own financial limitations and the reluctance of the private sector to circumvent sanctions on Iran mean that Chabahar’s crucial development is stalled and with it India’s access to Afghanistan.
Similarly, Jalili’s glib quip that India and Iran face the common threat of terrorism in the region mocks the fact that the last terrorist incident in New Delhi against Israeli diplomats emanated from Tehran. Iran is yet to provide reassurances that such incidents will not recur.
Finally, on the nuclear issue, Jalili’s ruling out any direct role for India in facilitating the so-called 5+1 dialogue between Iran and the five permanent members of the UN Security Council (UNSC) plus Germany echoes New Delhi’s reluctance to be part of this process. Besides, following the failure of the latest International Atomic Energy Agency visit to Iran, the next round of the 5+1 dialogue set for late January is not likely to achieve any breakthrough. More so, given the June Iranian presidential elections and the unlikelihood of lame duck president Mahmoud Ahmadinejad being able to deliver on any commitment.
However, given India’s own strategic interests in ensuring that Iran does not acquire the bomb, it is imperative that we seek to address this vexed issue at the bilateral level and through the India, Brazil, South Africa (IBSA) grouping. This will also strengthen India’s case for membership of the NSG and other non-proliferation groupings as well as the UNSC.
Failing to address the trilemma with Iran directly and, worse, depending on others to secure its interests is detrimental to India’s vital interests. Exploring alternative solutions between now and 2014 (when the US and its allies withdraw from Afghanistan, and Iran is expected to have a nuclear weapon capability) would enhance India’s reputation as well as its strategic relationship with Iran.
W.P.S. Sidhu is a senior fellow at the Center on International Cooperation, New York University. He writes on strategic affairs every fortnight. Comments are welcome at firstname.lastname@example.org