In spite of its non-aligned history and its tradition of a decades long partnership with Moscow dating back to the 1940s, India’s contemporary foreign policy is a far cry for that of its comparatively recent past. Under Premier Narendra Modi’s BJP, India has begun allowing its historic friendship with Moscow to quietly die while engaging in a lopsided security partnership with the US which fits in with Washington’s policy of antagonising China and Pakistan using India as the convenient geopolitical bait. Ironically, in spite of all this, India still finds itself on the receiving end of Donald Trump’s protectionist tariffs, thus proving just how one-sided Washington’s new partnership with New Delhi is in practical terms.
India has already capitulated to threats of so-called second party sanctions which the US was set to level against its new partner due to New Delhi’s previous agreements to purchase new weapons from Russia. But while India readily cut off a weapons deal with Russia rather than attempt to negotiate with its US partner over a historic relationship with Moscow, Turkey took the opposite route. While Turkey is a long time member of NATO and has only recently become a valued partner of Russia, Ankara has remained firm regarding its desire to complete the purchase and delivery of Russian made S-400 missile defence systems to Turkey soil. This has been the case even though the US has been more vocal in its threats to sanction Turkey over the matter than Washington was with India.
Just as countries that transact deals with Russia are subject to second-party sanctions from Washington, the same is true of countries that transact deals with Iran. Here, India too has been threatened and unlike others who also buy large quantities of oil from Iran, India is already showing signs of capitulating to the US without such must as a minor rhetorical fight-back. This attitude of India’s has not gone unnoticed in Iran. The influential Tehran Times recently published an article titled “Is U.S. President officially in charge of India’s foreign policy now?”
The article begins by stating,
“Many countries have felt the heat. But among Iran’s three biggest buyers of oil – China, India, and Turkey – only India has buckled under the U.S. pressure. These three countries account for about half of Iran’s oil exports.
Ankara and Beijing have refused to cut oil imports from Iran, claiming that the corrosively unilateral U.S. sanctions are not binding on them so they won’t pay heed to Trump’s diktats. China, Iran’s biggest purchaser, accounts for about one-quarter of Iran’s oil sales – 600,000 barrels a day out of total 2.2 million barrels a day Iran exports. What makes it difficult to persuade China to limit its purchases from Iran is the escalating trade war between Beijing and Washington”.
In comparing India negatively to both China and Turkey, Iranian media is clearly conveying an official attitude of grave disappointment over the fact that its Indian partner, a country which often presents itself as a credible “alternative” to China, has been so systematically compromised due to its relations with the US – something that isn’t true of Turkey in spite of NATO membership and nor is it true of China in spite of the fact that Beijing exports billions of Dollars worth of goods to America.
But beyond Iran being clearly upset that India has not vowed to continue buying Iranian oil in spite of threats from Washington, the leaders in Tehran are also clearly worried over the prospects that US sanctions will frighten India away from its major investment in Iran – the Chabahar Port on the Gulf of Oman.
Iran’s Chabahar Port on the Gulf of Oman represents the crowning achievement of Indo-Iranian cooperation in recent decades. The port itself represents the centre of the wider North-South Transport Corridor (NSTC) which will link India to Russia and the wider north-western Eurasian space via Iran and Azerbaijan. While under Premier Narendra Modi, India has sought to sell NSTC as an alternative to China’s One Belt–One Road and in particular as rival to the China-Pakistan Economic Corridor which links China to the wider Indian Ocean space via the Arabian Sea port at Gwadar, Iranian officials who themselves are eager participants in One Belt–One Road, have wisely distanced themselves from India’s zero-sum narrative on Chabahar and NSTC more widely.
Likewise, as Iranian relations with Pakistan continue to improve, it also remains clear that Iranian leaders are carefully avoiding being sucked into south Asia’s manifold rivalries by maintaining healthy ties with China, India and increasingly Pakistan simultaneously.
As it stands, Gwadar is a more substantial port vis-a-vis Chabahar in terms of its capacity and the fact that unlike the Indian built port in Iran, the Chinese built Gwadar is a Panamax deep water port. In this sense, both Gwadar and Chabahar could function together on the win-win model which would see some of the supplies shipped from China to Pakistan via Gwadar being routed on to Chabahar depending on their ultimate destination. Here one could see One Belt–One Road and the North South Transport Corridor functioning as integrated rather than a rival logistics networks – something that Pakistani officials recently spoke about with optimism.
Now though, India’s very presence in Chabahar may be impacted negatively as the US moves to sanction countries that conduct business with Iran. The US CAATSA sanctions aimed at Iran are back in the spotlight after the US withdrawal from the JPCOA (aka Iran nuclear deal) caused Washington to threaten many of its longstanding allies against conducting further business with Iran under the threat of so-called second party sanctions. These threats have most notably been aimed at the European Union, in spite of the fact that the bloc remains rhetorically adamant that it will continue to preserve the JCPOA without US involvement.
India has also come under threat of sanctions due to its healthy relationship with the Islamic Republic. The US has stated that it will sanction Indian companies who do business with Iran and this week, the US issued an even more specific threat to its Indian partner, stating that New Delhi will face sanctions if it continues to purchase Iranian oil.
Last month it was reported that international investors in Chabahar were beginning to show signs of nervousness in light of the new sanctions threats from Washington. As India is already facing tariffs on its exports to the United States while simultaneously cutting itself off from a would-be win-win Chinese partnership, India is scarcely in a position to economically leverage the United States which under Donald Trump has taken a merciless approach to conducting trade wars with allies as well as threatening partners with sanctions if they do business with countries including Russia, Iran and the DPRK (although this might soon change in the case of the DPRK).
This could mean that as the primary investor and operator of the Chabahar Port, India could find itself cut off from its own investment under the cloud of sanctions. If it comes to this and India is forced to either partially or even entirely withdraw from the Chabahar project, it would mean that Iran would seek a new international partner for the port.
he only realistic partner to take over Chabahar would be China, a nation with experience in port building and management, a country that has shown itself to be able to transact deals with Iran in spite of the attitude of Washington and a country that because of America’s own dependence on Chinese goods – is largely sanction proof for all practical purposes.
Not only could China help to revive the economic fortunes of Chabahar if India becomes frightened off due to threats from the United States, but China could actually help Chabahar to grow both infrastructurally and commercially by linking it into a uniformed trade route centred on the larger Gwadar port and existing One Belt–One Road lines of connectivity in the region. This would ultimately be a win-win for China, Iran and Pakistan.
If India were to abandon the underlying prejudices behind its zero-sum approach to antagonising both China and Pakistan, India could actually remain active in Chabahar as key player in a wider Sino-Iranian partnership which would necessarily also include Pakistan via CPEC. This could help to not only reduce tensions with India’s largest neighbours, but it could demonstrate that the only way for India to effectively leverage US threats of further tariffs and sanctions is by keeping at least one foot in China’s already open door.
However, given the attitude of the current Indian government, such a win-win model looks increasingly distant however theoretically attractive it might sound when analysed objectively. Because of this, the more likely scenario for Chabahar will be a short-term waiting game where India will see just how far the US is willing to punish its newfound south Asian partner due to its dealings with Iran.
If India’s involvement in Chabahar does come under a US financial attack, it is all but certain that India will minimise its involvement in the flagship project – thus paving the way for China to take over where India left off.
The choice for India therefore is three fold: New Delhi can simply hope for the best while possibly sweetening the deal by making concessions to the US over existing tariffs, India can bow out of Chabahar in order to possibly attain better trading relations with the US in the future or India can work with China to leverage the US over its anti-Iranian position.
While Iran is clearly worried about losing India as a market for its oil and losing Indian investment and cooperation in Chabahar, in the long term, the new reality of India capitulating to the US so readily could actually help to accelerate Iran’s much needed rapprochement with Pakistan, as well as affirming that both China and Turkey are far more reliable partners of Iran than is a pro-US India.