Authors: Dhritiman Banerjee and Subarna Mustari*
India entered as a stakeholder in the development of Iran’s Chabahar port in 2016 as part of an India- Afghanistan- Iran trilateral agreement on Establishment of International Transport and Transit Corridor. A landmark strategic victory for India, this agreement not only connected New Delhi with Kabul but also provided India a link to Eurasia through the International North-South Transport Corridor (INSTC). Additionally, it sought to challenge China’s investment in the Gwadar Port in Pakistan as part of China-Pakistan Economic Corridor (CPEC). Indian involvement in the Chabahar- Zahedan Railway project therefore has far-reaching implications for New-Delhi’s interests in the Asian geopolitical scenario. However, after Iran’s signing of a landmark investment deal with China earlier this year, we aim to analyze the implications of the deal on India in this article.
The Middle East is particularly important to India because of its vast energy resources. Stephen P. Cohen feels that five factors steer India’s policy in the Middle East namely:
1. Energy Security: India is very reliant on Oil and Gas resources from the Middle East and therefore relations with most of the major suppliers including Iran, the UAE, Saudi Arabia and Iraq are strategically important to India. And India does not want to become a victim to a sudden increase in Oil and Gas prices or a temporary embargo of these resources as the pipeline from Central Asia to India via Iran, Afghanistan and Pakistan is not likely to materialize soon.
2. The Muslim Factor: Although a secular democratic State, India has a very high Muslim population who resonate with countries in the Middle East which brings out the relation between India’s foreign and economic policy on the one hand and domestic politics on the other. This linkage has particularly increased in importance after the passing of the controversial Citizenship Amendment Act (CAA) by the Modi Government which is thought to be discriminatory against Muslims and has provoked sharp criticism from the international community.
3. The Kashmir Factor: For Indian foreign policy it is of paramount importance that the Middle Eastern States do not interfere in Kashmir or support Pakistan regarding the issue. Therefore it conducts a “sophisticated balance of power diplomacy” in order to contain the spread of Pakistani influence regarding Kashmir and to keep the Kashmir issue out of all discussions.
4. The Israel Factor: India’s recent cultivation of strategic relations with Israel has led to important advancements in the technology, intelligence, and military sectors as well as important leverage in the US but many analysts in India are still skeptical about cultivating close relations with Tel Aviv. Eventually it can be said that a balance between Tel Aviv and Tehran will become an important factor in Indian Foreign Policy.
5. The Non-Proliferation Factor: Because of India’s strategic relations with the US, India does not want to violate American non-proliferation goals in the region. But Indian strategists have had a long history of skepticism regarding American non-proliferation strategies and tactics with skepticism. In fact the Indian leadership was at the forefront in the development of the theoretical case against the Non-Proliferation Treaty (NPT) and the global non-proliferation regime. In fact, most of the arguments developed by India are now used by Iran and North Korea to justify their opposition to the NPT and therefore India must find a solution to this paradox in the near future as although its record of horizontal proliferation has been very good, it has been an example for States regarding vertical proliferation.
China’s offer to invest $400 billion in Iranian oil and gas sectors over 25 years tokening a comprehensive trade and military partnership between the two nations is undoubtedly far more beneficial to Iran than India’s promise of a $150 million investment scheme over 10 years. This deal is mutually beneficial for both China and Iran and the Iranian economy reeling under sanctions will get a much needed lifeline. Similarly, China is facing international criticism over its aggressive political and military strategies that include attempts at hegemonizing the South China Sea (SCS) at the cost of the other littoral States, passing a new security law to strengthen its control over Hong Kong and engaging in a border standoff with India in Ladakh. This deal therefore allows China a strategic leverage in the Middle East. China’s strategic decision for such an investment into Iran comes at a notable time – immediately following the Sino-Indian Border Clash of June 2020. Iran’s decision to choose a more lucrative deal from a more lucrative regional partner facing the same extra-regional opponent – the United States – intersects directly with India’s vested security interests in Iran against both China and Pakistan. Furthermore, India’s relations with the United States puts both India and Iran in a very complicated situation with Iran at greater risk of allowing more Chinese presence than India in the region, given the former’s bigger investment and the mutual threat of the United States.
India, compared to China, not only has far less to offer economically to neutral yet strategic prospective allies (Iraq, Iran, and other Gulf nations) in countering China in the West Indian Ocean Region (IOR), but its alliance with the extra-regional United States has compromised Iran’s faith in India as concrete ally. With such a timely investment, China has in one stroke obtained a highly strategic regional ally against the United States in securing its energy concerns, and simultaneously taken the battle directly to Iran where India is attempting to undermine China’s String of Pearls (SOP) strategy (Gwadar Port, Pakistan) through the Chabahar Port.
Furthermore, India’s recent history of erratic dealings in the middle-east, and compliance with the US’s policies in Asia has dipped the region’s confidence in India as a reliable regional partner. China’s already expanding foothold in the middle-east and Africa, and stronger deliverance makes it a better prospective partner for Arab nations who see China as such. In fact, in recent years China’s influence has grown in the region through an increase in economic investment. Between 2005 and 2019, China has invested over $55 billion in the region according to the AEI’s China Global Investments tracker. Between 2004 and 2014, China also gave financial assistance of $42.8 billion to the region according to Aid Data Research lab. Also for many States in the Middle East, China is their most reliable trade and strategic partner as well as a key source of technology and armed drones. Therefore, it can be claimed that while Iran and China have patterned their foreign policies in such a way that it regionally benefits them against extra-regional influences; India’s current foreign policy narrative accounts to a degree of dependency on extra-regional powers that limits its regional interests of security against its two biggest border rivals – China and Pakistan. Secondly, India’s engagement with the United Sates in the maritime arena remains limited in the eastern side of the Indian Ocean at a time when India needs to increase a collaborative presence on the western side – which, given the unfavorable economic effects of the pandemic and wishful economic management of the Indian Government, leaves room only for clever diplomacy on India’s part. Therefore, Indian dealings in the middle-east and in the West IOR have to be strategically designed with not just extra-regional allies which share the same apprehensions of Chinese presence; but also look to secure greater strategic partnerships with East Asian nations like South Korea and Japan to balance its over-dependence on the United States for energy and geopolitically diversify its defense against China’s SOP doctrine.
India, apart from expedient solidification of its energy, trade, and security interests in the middle-east, has to double-down on its Act East Policy especially with Indonesia and Malaysia. In fact, in this regard it can be said that relations with these two countries, particularly with Indonesia, will be of paramount importance to India. This will help cement India’s claim of a rules based maritime order in the Indo-Pacific in order to check Chinese attempts to hegemonize the region. In this regard, the link between the Andaman and Nicobar Islands and the Aceh Province in Indonesia will cement maritime ties between the two countries and help to check Chinese advances near the strait of Malacca through the SOP strategy. However, a major restriction to such collaborations in this regard, would be the persecution of Muslims under the Modi government in India and the religious radicalism prevailing in the country. Another more viable option available to India is the QUAD group consisting of India, US, Australia and Japan. India can use this grouping to not only uphold its claim of a rules based maritime order but also gain a foothold in the SCS region and pose a challenge to China through close alliances with the QUAD and ASEAN (Association of South East Asian Nations). Therefore, to conclude, it can be said that a new Cold War maybe brewing between India and China which might set to define the very nature of Asian geopolitics in the near future.
* Subarna Mustari is an undergraduate student of Political Science at Bethune College, Kolkata. Her interests lie in Political Science and International Relations as well as in history of war, colonialism and philosophy. She has recently published for Modern Diplomacy.