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By Zafar Mehdi<\/a> I December 01 2022<\/p>\n\n\n\n <\/p>\n\n\n\n \u201cNot a choice, but a necessity.\u201d That\u2019s how Iran\u2019s Deputy Foreign Minister Ali Bagheri Kani stressed the importance of closer strategic and economic ties between Tehran and New Delhi during his visit to India in November.<\/p>\n\n\n\n Kani had a message for Prime Minister Narendra Modi from Tehran \u2013 strategic synergy is a win-win proposition for the two sides amid the shifting geopolitical and geo-economic landscape in the wake of the Ukraine war and the new world order.<\/p>\n\n\n\n Before the Trump administration reinstated sanctions on Iran in 2018, Iranian oil comprised nearly 11 percent of India\u2019s total oil basket. However, New Delhi buckled under US pressure and stopped importing oil from Tehran in a move that hampered their cooperation in other strategic areas.<\/p>\n\n\n\n Three years down the line, amid rapidly changing geopolitical power dynamics and the end of \u201cthe era of the unipolar world,\u201d as announced<\/a> by Russian President Vladimir Putin in June, India has become keen on recalibrating its ties with Iran, a traditional ally, in the midst of an energy crisis gripping the world.<\/p>\n\n\n\n It is worth noting that Russia became the biggest oil supplier<\/a> to India in October, supplying 935,556 barrels of crude oil per day, according to energy cargo tracker Vortexa, making up for 22 percent of the energy-dependent country\u2019s total crude imports, ahead of Iraq\u2019s 20.5 percent and Saudi Arabia\u2019s 16 percent.<\/p>\n\n\n\n Iran as an alternative energy supplier <\/strong><\/p>\n\n\n\n Faced with a burgeoning demand for oil and gas amid the global energy crisis and recent oil cuts by the OPEC+, India now looks poised to resume oil imports from Iran, defying US sanctions, The Cradle<\/em> learned from sources in Tehran and New Delhi. <\/p>\n\n\n\n Interestingly, India\u2019s petroleum minister Hardeep Puri hinted at it during his visit to Washington in October, saying New Delhi will buy oil from wherever it has to. Russia, as we know, is already shipping oil to India, despite strong US pressures. <\/p>\n\n\n\n Talks are currently underway between India and Venezuela, especially with the US easing oil-related sanctions against Caracas. This, by extension, has opened a window of opportunity for India and Iran to revive their energy trade. The good news is that both sides look interested. <\/p>\n\n\n\n Iran has already expressed its readiness to resume energy trade with India. Last month, newly-appointed Iranian ambassador to New Delhi, Iraj Elahi, announced that Iran is willing to provide low-cost crude oil to India to ensure the country\u2019s energy security, something top Indian officials have in recent months cited as the government\u2019s priority.<\/p>\n\n\n\n A win-win proposition <\/strong><\/p>\n\n\n\n In 2018-2019, India purchased $12.11 billion worth of crude oil from Iran, which plummeted to zero in May 2019 after the significant reduction exemption (SRE) period ended.<\/p>\n\n\n\n Likewise, trade between the two countries dropped from $17.3 billion in 2018-2019 to $4.77 billion in 2019-2020. Although it has ultimately failed<\/a> to achieve its objectives, Washington\u2019s \u201cmaximum pressure\u201d campaign had a negative impact on India-Iran relations.<\/p>\n\n\n\n However, ties have since markedly improved, as evidenced by Bagheri Kani telling the Indian press that the Islamic Republic is ready to meet<\/a> the country\u2019s growing energy needs, while India can in turn contribute to Iran\u2019s food security as a major food producer.<\/p>\n\n\n\n This, he asserted, would help in boosting the process of multilateralism in the international system, which essentially means the death of US unilateralism more than three decades after the end of the Cold War and the collapse of the former Soviet Union that paved the way for the era of the unipolar world.<\/p>\n\n\n\n Suhasini Haidar, diplomatic affairs editor at The Hindu<\/em> and a leading Indian analyst, termed Bagheri Kani\u2019s visit to India as \u201csignificant,\u201d saying it \u201cshows a commitment to India-Iran ties by both governments despite geopolitical divides in the world on issues like the Ukraine war.\u201d<\/p>\n\n\n\n Penalized by US sanctions <\/strong><\/p>\n\n\n\n Haidar described Iranian crude as \u201csweeter, lighter, cheaper, and easier to transport to India than other options,\u201d calling the Indian government\u2019s decision to cut Iranian imports \u201cirrational.\u201d<\/p>\n\n\n\n \u201cIt was irrational of the Modi government to have canceled India\u2019s imports of Iranian oil under threat from the Trump administration, and it would make sense if they decided to restore the oil trade between the two countries,\u201d she told The Cradle<\/em>.<\/p>\n\n\n\n Haidar said it remains to be seen if the Modi government will be willing to resume oil imports from Iran, \u201cdespite several signals that both sides are exploring their options,\u201d especially after the latest sanctions<\/a> on an Indian company transporting Iranian oil.<\/p>\n\n\n\n Mumbai-based Tibalaji Petrochem Private Limited was sanctioned in late September for shipping Iranian petrochemical products to China. It was the first time an Indian company was sanctioned by the US for dealing with Iran.<\/p>\n\n\n\n In his meeting with his Indian counterpart Vinay Mohan Kwatra, Bagheri Kani pointed to the \u201cnecessity\u201d of regional cooperation between the two countries, which he said would \u201ctake away the opportunity from foreigners to exploit the lack of cooperation.\u201d <\/p>\n\n\n\n The sentiments were mutual as India\u2019s foreign ministry spokesman, in a statement following Bagger Kani\u2019s meeting with Kwatra, said the two officials \u201cdiscussed bilateral relations, including the development of Chabahar Port\u201d and \u201cregional and international issues of mutual interest.\u201d<\/p>\n\n\n\n Time to shore up ties <\/strong><\/p>\n\n\n\n According to observers, the time is now ripe for the two sides to shore up bilateral ties and multilateral cooperation, with Tehran set to become a full member of the Shanghai Cooperation Organization (SCO) as well as the BRICS group, given its close ties with Russia and China.<\/p>\n\n\n\n Notwithstanding existing challenges, Iran and India share mutual interests in trade and connectivity. Iran\u2019s full SCO membership could prompt the two sides to focus more on connectivity projects like the Chabahar Port, which links with the International North-South Transport Corridor (INSTC), the multi-mode network of ships, rail and roads for moving freight between India and Iran, among other countries.<\/p>\n\n\n\n \u201cIndia and Iran have important trade needs, including in wheat pulses and commodities, as well as oil reserves. And the connectivity engagement is very important for India through Chabahar and through the INSTC,\u201d Haidar explained.<\/p>\n\n\n\n Importantly, in recent years, Chabahar Port in Iran\u2019s southeastern Sistan-Baluchestan province has emerged as a key area of cooperation between Tehran and New Delhi, which will provide India access to Afghanistan and Central Asia through Iran, ending its reliance on arch-rival Pakistan.<\/p>\n\n\n\n Rezaul Hasan Laskar, the foreign affairs editor at Hindustan Times<\/em>, says the strategic port has \u201cbecome more important following its growing use\u201d but that \u201cit needs to be connected to Iran\u2019s railway network.\u201d <\/p>\n\n\n\n While the first section of the Zahedan-Chabahar railway line is nearing completion, official sources in Tehran said the agreement between the two sides to construct the 628-kilometer (390 miles) railway line had faced \u201cserious impediments\u201d due to New Delhi\u2019s reluctance to start work fearing US sanctions.<\/p>\n\n\n\n \u201cDespite India\u2019s close ties with the US and Israel, its decision to build strategic ties with Iran, and Iran\u2019s according special projects to India like Chabahar Port despite its ties with China are a constant reminder of this special relationship,\u201d Haidar told The Cradle<\/em>.<\/p>\n\n\n\n Joint cooperation with Beijing and Moscow <\/strong><\/p>\n\n\n\n Sources in Tehran and New Delhi said the use of rupee-rial trade<\/a> was also \u201cseriously considered\u201d during Bagheri Kani\u2019s New Delhi visit, with both sides agreeing that a banking mechanism that is not tied to the west is key to strengthening the process of multilateralism, and paving the way for the resumption of trade.<\/p>\n\n\n\n Laskar of Hindustan Times<\/em> confirmed that the senior Iranian diplomat \u201creiterated Iran\u2019s offer to resume oil supplies and raised the issue of trade in national currencies.\u201d<\/p>\n\n\n\n The changing geopolitical landscape in the wake of growing anti-western mechanisms, including SCO and BRICS, led by China and Russia, is also likely to propel increased cooperation between Tehran and New Delhi.<\/p>\n\n\n\n Laskar, however, believes that the SCO has not been a particularly crucial grouping for India in recent years, \u201clargely because of the tensions with China,\u201d adding that India\u2019s biggest concern about the expansion of BRICS is that \u201cit shouldn\u2019t become a China-centric grouping,\u201d underlying Sino-India tensions. <\/p>\n\n\n\n Meanwhile, Russia remains a common ally of India and Iran, which is evident in Moscow and New Delhi looking to ramp up trade via Tehran along the INSTC \u2013 the strategic route that has assumed tremendous significance since the start of the Ukraine war. <\/p>\n\n\n\n![\"\"](\"https:\/\/norkhosq.net\/wp-content\/uploads\/2023\/01\/image-3.png\")
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