With the US lifting sanctions on Iran, the country is looking to expand trade and business ties with many nations, including India. Considering that India maintained commercial contacts with Iran during the sanctions, it is keen that India invests in infrastructure projects there. There are multiple advantages for India in this. For starters, it gets access to Iranian gas (the second-largest reserves globally) and oil (fifth-largest). India has also been looking for a stake in the Farzad B gas field that is estimated to have reserves of 12.8 trillion cubic feet. That would supplement the oil and gas that India sources from the Middle East. Also, since some of India’s biggest refineries—Mangalore, Jamnagar, Kochi and Vadinar—that account for refining capacity of 105 mmtpa are on the west coast, it means much cheaper freight. In FY15, Iran accounted for just 6% of Indian oil imports down from being the second-largest supplier with a 17% share almost a decade ago. That could soon change. The advantage with Iran is not restricted to fuel imports.
Iran has invited India to invest in infrastructure projects worth $8 billion that include railway lines, bridges and ports. That fits in with India’s plans to build linkages with the CIS countries, that have some of the largest energy reserves. Among the projects on offer is the 600 kilometre Chahbahar -Zahedan rail link. That fits in with the Indian plan to help Iran build a port at Chahbahar, which is just across the border from Pakistan’s Gwadar where China is building a port as part of the One Belt, One Road (OBOR) programme. But, for that to happen, India needs to take quick decisions on its investment plans in Iran. India has also been looking at building a 1,300 kilometre sub-sea pipeline that brings gas from Iran and Oman to Gujarat. The deep sea pipeline will skirt the Pakistan economic zone in the Arabian Sea. The time is right for the BJP government to engage with Iran in a big way. After all, the advantages in the relationship are far too many. Both foreign minister Sushma Swaraj and prime minister Narendra Modi are slated to visit Iran soon as part of the dialogue process. The advantage that Iran offers is that it is geographically well positioned to serve as India’s gateway to Afghanistan, Central Asia, the CIS countries and Russia. But, with the world wooing it today, India needs to push the right buttons quickly.