India-Iran reiterate bilateral ties. Revival of oil trade expected soon: expert | The Financial Express

India-Iran reiterate bilateral ties, revival of oil trade expected soon says expert

Since this was the first meeting in person PM Modi extended his greetings to the Iranian President for assuming the presidency of his country.

India-Iran reiterate bilateral ties, revival of oil trade expected soon says expert
Leaders of India and Iran took stock of the Iran Nuclear Agreement.

Leaders of India and Iran in their first in person meeting took stock of the Iran Nuclear Agreement — the Joint Comprehensive Plan of Action (JCPOA), progress in the development of Chabahar Port, bilateral ties and also developments in the region including Afghanistan. The SCO summit was an opportunity for both India and Iran to reinforce and reiterate their traditional ties that have been in a wrap for almost over two decades due to the US-Iran power play.

“The first face to face meeting between Indian Prime Minister Narendra Modi and Iranian President Ebrahim Raisi at Samarkand on Friday was an opportunity to reiterate bilateral ties,” opines Maj Gen Nalin Bhatia, Indian Army Veteran and commentator on West Asia.

Sharing his views with Financial Express Online, he says, “While each side has been keen to move forward, the shackles of US sanctions have had a debilitating effect on the Indo-Iran relations. The fact that both sides share historic cultural ties is well known. In spite of the threats and external factors the two sides have maintained a steady exchange of visits and negotiations between the top rung leadership of both countries.”

Oil Trade

Of Iranian interest would be the revival of Oil trade between India and Iran. India, once a major importer of Iranian crude had to stop import of Iranian oil due to threat of US sanctions. “The resumption of Iranian oil supplies to India looks promising, as there is a new Nuclear Deal between western powers and Iran underway. And it is inching towards a resolution. More so since global oil prices have been on an upward trajectory in the backdrop of US sanctions on Russian oil supplies. Also India has stood its ground to import Russian oil citing its national interest, it is only a matter of time that India opens up to import of Iranian oil,” Maj Gen Nalin Bhatia observes.

MEA Statement & FS Briefing

Both leaders, according to an official statement issued by the Ministry of External Affairs, during talks underscored the importance of regional connectivity and reviewed the progress in the development of the Shahid Beheshti terminal, and Chabahar Port.

In a special briefing in Samarkand, Uzbekistan, Foreign Secretary Vinay Kwatra told the media persons that energy security remains a key pillar in bilateral relations between India and Iran. However, the official statement of the MEA makes no mention of either energy security or India’s plan to restart crude purchase from that country.

Since this was the first meeting in person PM Modi extended his greetings to the Iranian President for assuming the presidency of his country. Whole range of issues were discussed by the two leaders including trade, economic cooperation, energy related issues, investments and more, FS told the media persons in Samarkand.

India is keen to make Chabahar port as the main hub for connectivity with the Central Asian countries and beyond.

Chabahar port has been one of important pillars of engagement between India and Iran, and as reported earlier India has invested close to about US $ 85 plus in the project. There is a need for both countries to expedite the growth of the port further as it serves as a critical transit point for a larger connectivity across the region, North-South, East-West.

The Iranian leader also briefed PM Modi on the status of the JCPOA negotiations. Following US led sanctions imposed by the former US President Donald Trump administration India stopped buying crude from that country from May 2019. Iran, however, has been urging India to resume crude trade, as it feels if India can continue oil from Russia despite US led sanctions, it can do the same with oil from Iran. No decisions were taken during the meeting in Samarkand.

What is JCPOA?

Financial Express Online has reported earlier about the JCPOA which was an accord reached between Iran and several other countries including the US and several European countries. Under this in 2015, Iran had agreed to dismantle much of its nuclear programmes and to also open up its facilities for international inspections.

In 2018, the former US President Trump walked out of the deal, as he claimed that Iran had failed to curtail its nuclear programme. Now, following the Ukraine- Russia war, the US Biden administration has made efforts to revive the deal, though direct talks between the two countries have yet to start.

 Expert View

“Amid evolving geo political developments and contours, the need for two sides to cooperate on the issue of energy supplies to India and establish connectivity through Iran for establishment of trade routes between Eurasia, and Afghanistan and India using INSTC and Chabahar Port respectively, has been paramount. Besides, the change of regime in Afghanistan in 2021 and anointment of Taliban regime in Kabul is equally of interest to both sides,” states the West Asia commentator. 

Also ReadSignificance of the SCO: It helps India secure its foothold in Eurasia

According to him, “The International North South Transport Corridor (INTSC) was conceived by India, Russia and Iran in year 2000 aimed at establishing a multi model transport mode to provide for approximately 7200 kms of connectivity between India (Mumbai port) and St Petersburg in Russia and reduce the transit time from 45 days to 25 days. Over the years a large number of countries from Central Asia to the Middle East joined the pact to benefit from its potential.”

Similarly, Iran has been the focal point of Indian efforts to enhance its trade and connectivity with Afghanistan and further to Uzbekistan and Central Asia. Opening of Chabahar was to facilitate this link and also significantly enhance Afghanistan’s potential to be used for transit of goods through its territory, enabling it to improve its own network of road and rail links with its neighbours. However regime change in Afghanistan seems to have put a temporary halt to such ambitions.

Also Read: India and SCO: Navigating new equations

According to the Indian army veteran, “The bilateral ties between the two countries have always been strong, notwithstanding geo political turmoil. They are surely set to improve with the Indian Prime Minister extending an invitation to Iranian President to visit India and Iran looking to join SCO as full time member in 2023 in Delhi when India assumes its Presidency.”

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