If the United States and Iran finally make peace, India should be ready to work more closely with Iran
When times are difficult, people often look for signs that things are getting better. The US and Iran signed their peace agreement two days earlier than expected. Is that a sign that peace will last? Maybe. But there are still reasons to be careful. US President Donald Trump warned that America would bomb Iran if it broke the agreement. That goes against the first rule in the agreement, which says both countries should avoid threatening each other. Other problems, such as fighting involving Israel and Lebanon, could also damage the peace process. Still, peace now seems possible, and India should start thinking about the opportunities it could create.
Even though Iran has faced economic sanctions for many years, it is not a poor country. On average, people in Iran earn about twice as much as people in India. Iran is also a large country with a big population, and it has had cultural links with India for centuries. However, trade between the two countries has fallen. India’s rice exports to Iran dropped from $1.2 billion in 2018 to about $700 million. India also stopped buying Iranian oil and gas in 2019 because of US sanctions. Before that, Iran was one of India’s biggest energy suppliers.
If sanctions on Iranian oil and gas are removed, India should start buying them again. Iran is one of India’s closest neighbours in the Gulf region, which could make energy imports cheaper. It would also improve India’s energy security. If the Strait of Hormuz is ever blocked, oil and gas could still reach India through Iran’s southeastern port of Chabahar.
India first proposed helping to develop Chabahar in 2003. The port could give India access to Iran, Afghanistan, Central Asia and Russia without having to go through Pakistan. Progress has been slow, but India should continue the project. It should also try to take part in the $300 billion plan to rebuild and develop Iran that is mentioned in the peace agreement.
Iran’s oil and gas industry is another opportunity. India needs energy, and Iran has some of the world’s largest oil and gas reserves. What Iran lacks is enough infrastructure to produce all of it. For example, Saudi Arabia can produce much more oil each day than Iran. In 2008, Indian government companies discovered Iran’s Farzad-B gas field and were expected to help develop it, but the project never moved forward. If relations improve, India should pursue such opportunities more actively. However, it should wait until the US-Iran agreement is fully completed and secure.
Disclaimer
Views expressed above are the author’s own.
