If the United States of America had not coerced India to throttle its relationship with Iran in 2018, we would likely have had bilateral annual trade of over $20 billion (importing 650,000 barrels a day of crude oil) and built strategic connectivity to Afghanistan and Central Asia through the Chabahar port. Nothing in the bilateral relationship was responsible for our loss. India was forced to reduce its purchases of oil and its own merchandise exports to Iran by Washington’s sanctions and quotas.
Now that the US-Israeli war on Iran has created a new situation in West Asia, India must take the initiative to quickly rebuild ties with Tehran. Whatever positions New Delhi took before and during the war, realism demands that it deal with the consequences as they have unfolded.
Changed geopolitical circumstances demand that New Delhi re-prioritize its interests in West Asia. For nearly two decades, India has deprecated its relations with Iran as it sought to build strong partnerships with the US, Israel, Saudi Arabia and United Arab Emirates.
This approach yielded rich dividends, as relations with Washington flowered after the India-US nuclear deal. The Narendra Modi government transformed ties with Abu Dhabi and Riyadh even as it built an extensive relationship with Tel Aviv.
But these gains came at a cost: the combined weight of India’s West Asian partnerships discouraged closer ties with Tehran. The Iranian government, for its own reasons, did little to compete with Iran’s neighbours to court New Delhi. Washington’s demand that New Delhi stop buying Iranian crude oil was just the final blow.
Yet, there have always been strong geopolitical reasons for India and Iran to draw closer together. The Kautilyan calculus literally suggests Iran—if it has strategic autonomy—can be an ally. Persian Shia Iran has never been comfortable with its Arab Sunni neighbours. As much as Pakistan tries to pursue its own interests, Tehran has well-founded suspicions that Islamabad will follow the Saudi line. These would have strengthened after Saudi Arabia and Pakistan signed a mutual defence agreement.
Religious ideology and political rhetoric might confound the audience, but some hard-nosed strategists in Tehran see India as a potential ally, and their counterparts in India return the favour.
In the mid-2000s, when Pakistan’s General Pervez Musharraf was taking the US for a ride in Afghanistan, I had argued that it is in India’s interests to start a diplomatic initiative to bring Washington and Tehran together. India was among the few countries that had good relations with both and would benefit from their rapprochement.
But I was told that New Delhi did not have an appetite to even attempt such a venture. India’s interests lay with the Gulf Arab monarchies that did not want Iran to get any stronger. It was also pointed out that powerful Israeli lobbies in Washington would not allow such a shift to take place, so there was no point even trying. To be fair, New Delhi was working hard on the US-India relationship at the time and might have calculated that there was no point in letting the Iran equation further complicate the situation.
That is history. As fantastic as it might appear today, it is in India’s interests for the divide between Washington and Tehran to be bridged. We must not lose sight of this. The political winds might not be favourable today, but things can change. Vietnam became an American partner in just over two decades after the two countries fought a long, bloody war. More importantly, India’s strategic establishment must realize that initiative makes a difference.
For now, the immediate task is to start a new phase in India-Iran relations. The Islamic Republic might have survived a war against two vastly superior adversaries, but still faces the task of rebuilding damaged infrastructure and reviving its economy. Also, it is by no means certain that its domestic political upheavals are over. So, despite its disappointment with some of New Delhi’s recent actions, Tehran is likely to be receptive to an outreach by India. President Masoud Pezeshkian’s invitation should be interpreted as such.
A low-profile initiative to provide humanitarian and medical supplies should be followed by attempts to get direct bilateral trade back on track. India will benefit from a quick resumption of crude oil and bitumen imports from Iran. Similarly, Iranians would welcome Indian tea, rice, wheat and pharmaceuticals.
New Delhi should offer a line of credit for Iran to import such goods from India. Beyond this, New Delhi could make it easier for Iranians to seek medical treatment in India.
New Delhi should move now—before the 60-day period of the memorandum of understanding between the US and Iran runs out—because it is risky. It is the risk that’s the signal.
The author is co-founder and director of The Takshashila Institution, an independent centre for research and education in public policy.