The two countries shared a border till 1947 and share several common features in their language, culture, and traditions. Both South Asia and the Persian Gulf have strong commercial, energy, cultural and people-to-people links. Independent India and Iran established diplomatic links on 15 March 1950.
The Shah visited India in February/March 1956 and Prime Minister Pandit Jawaharlal Nehru visited Iran in September 1959.
The Iranian Revolution in 1979 introduced a new phase of engagement between India and Iran marked by the exchange of high-level visits.
- India and Iran share close civilizational ties since the times of the Persian Empire and Indian kingdoms.
- Iran is an important nation in India’s neighbourhood and in fact, the two countries shared a border until India’s partition and independence in 1947.
- The “Tehran Declaration” signed during former Prime Minister Atal Bihari Vajpayee’s visit to Iran affirmed the shared vision of the two countries for an “equitable, pluralistic and cooperative international order”.
- It recognized the then-Iranian President Mohammad Khatami’s vision of a “dialogue among civilisations” as a paradigm of international relations based on principles of tolerance, pluralism and respect for diversity.
- The two countries have in place several bilateral consultative mechanisms at various levels whose meetings take place regularly.
- Iran frequently objected to Pakistan’s attempts to draft anti-India resolutions at international organizations such as the OIC (Organisation of Islamic Republic) and the Human Rights Commission.
- India welcomed Iran’s inclusion as an observer state in the SAARC regional organization.
- India-Iran economic and commercial ties have traditionally been buoyed by the Indian import of Iranian crude oil.
- India’s exports to Iran include petroleum products, rice, machinery & instruments, manufacturers of metals, primary and semi-finished iron & steel, drugs/pharmaceuticals & fine chemicals, processed minerals, manmade yarn & fabrics, tea, organic/inorganic/agrochemicals, rubber manufactured products, etc
India and Iran have set up several projects such as:
- After engaging in negotiations for several years, the Indian Government finally joined the Turkmenistan, Afghanistan, Pakistan, and India (TAPI) gas pipeline over the Iran–Pakistan–India pipeline (IPI) and the Myanmar–Bangladesh–India pipeline (MBI).
- South Pars gas field and LNG project,
- Chahbahar container terminal project and Chahbahar-Zaranj railway project, etc.
Both countries have set up joint ventures such as the Madras Fertilizer Company and the Chennai Refinery. Indian companies such as ESSAR, OVL, etc have a presence in Iran.
India is also a member of the International North-South Corridor project.
The two countries have finalized a Bilateral Investment Promotion & Protection Agreement (BIPPA) and a Double Taxation Avoidance Agreement (DTAA).
- For India, the location of Iran is strategic and crucial due to its geographical positioning between the Persian Gulf and the Caspian Sea.
- Iran is important to India as it provides an alternate route of connectivity to Afghanistan and Central Asian countries, in the wake of hindrances by Pakistan in using land routes.
- Iran has one of the largest deposits of crude oil and natural gas in the world, which India can tap for meeting its energy needs.
- On the other hand, for Iran, the strategic location of India is crucial as it aids its “Asia-oriented” foreign policy.
- India is the second-largest populous country and a major economy with a huge demographic dividend.
- It gives Iran access to the 5th largest economy to invest in and enhance trade relations with.
Culture and Education
- India and Iran maintain regular cultural and educational exchanges.
- An MoU was signed in January 2008 between the Indian Council for Cultural Relations (ICCR), New Delhi and the Iranian Cultural Heritage, Handicrafts and Tourism Organization (ICHHTO) on the holding of “Days of Culture” in two countries.
- Accordingly, the Iranian cultural week was held in New Delhi and Mumbai in April-May 2008. India held its “Days of Culture” in Tehran and Shiraz from May 10- 17, 2011 which was attended by over twenty thousand people.
- India is to set up a Cultural Centre in Tehran.
- Iran has two Cultural Centers in Delhi and Mumbai.
- There are about 8,000 Iranian students studying in India.
- India provides 67 scholarships every year to Iranian students under ITEC, ICCR, Colombo Plan and IOR-ARC schemes.
Issues in India-Iran relations
The U.S. sanctions (CAATSA) led to the stoppage of oil imports from Iran in 2019. This was after the revocation of the Iran nuclear deal. The act hurt India’s energy security.
India’s close relations with Israel and Iran’s ties with China are also bones of contention in the bilateral relations.
The geopolitical stand of Iran in Yemen against Saudi Arabia and UAE, who are close partners of India, also tends to cause discomfort in the relations.
Iran’s tough statement on the Indian government’s abrogation of Article 370 of the Indian Constitution giving special status to Kashmir is another cause of tension. Iran’s previous regime had on a couple of occasions made statements instigating the Muslims of Kashmir against the governance which was reprimanded by India severely.
The termination of Indian participation in the Chhabahar Railway Project and Farzad B gas field was another sour phase.
Importance of developing Chabahar Port by India
- A commercial contract for the development and operations of Chabahar Port was signed between India and Iran in 2016.
- The contract is for a period of 10 years.
- Chabahar Port will provide India with an alternative and reliable access route into Afghanistan and also a reliable and more direct sea-route access into the Central Asian region.
- It will eliminate dependency on Pakistan for access to Afghanistan and Central Asia.
Restructuring India-Iran relations?
- Unlocking Bilateral Potential: The bilateral ties could open doors to fully exploit the potential of cooperation between India and Iran. Which would ultimately lead to the regional and global good.
- Cheaper Crude Oil: India may well consider restarting oil imports from Iran, Should India change course and resume imports of Iranian oil, it could potentially encourage some other countries to follow suit and open up additional oil in the market, which could eventually bring prices of crude oil down.
- Connectivity with Eurasia: The International North-South Transport Corridor (INSTC), an ambitious project launched at the start of this century, aims to connect India, Iran, Afghanistan, Russia, Central Asia, and Europe through multi-modal transport, reducing the transit time of goods drastically.
- Although some part of it has been operationalized, again, due to sanctions on Iran, its full potential has not been realized. India and Iran could well play a major part in giving INSTC the required boost to reap the benefits of resultant trade.
- Energy Security: The Iran-Oman-India gas pipeline (IOI) to is an ambitious project that has been stuck for a long time. Fortunately, Iran and Oman signed a deal during Raisi’s recent visit, to develop two gas pipelines and an oil field along their maritime borders.
- If this comes through, there is potential for the pipeline to be extended to India, which would help overcome the loss of the failed Iran-Pakistan-India (IPI) pipeline and facilitate the supply of natural gas to India.