Time to Adjust: Challenge for India to Fit Into 'Shrinking Space' in Iran

In his upcoming visit to Iran, Indian Prime Minister Narendra Modi's will cover more than just the Chabahar port agreement.

"The visit of Prime Minister to Iran will focus mainly on connectivity and infrastructure, energy partnership, boosting bilateral trade, promoting regular consultation on peace and stability, particularly in our region & extended neighborhood," Joint Secretary for the Ministry of External Affairs Gopal Wagle said.

India's desire to reclaim the influence it once enjoyed in Central Asia before the dawn of colonialism can only be reasonably realized through cooperation with Iran. Therefore, it was "urgent" for India to engage with Iran at the backdrop of  warming Chinese-Iranian relations. Only a week ago, Iran handed over development of phase two of the North Azadegan and Yadavaran oilfields, which are of immense strategic significance, to China. This was part of a larger investment agreement signed between the two nations in January this year. Both the countries have set a target of 600 billion dollar in trade between them over the next ten years. 

"But there is still space for India to enter. There are lots of energy partnership that are open between India & Iran. Iran is also keen to engage with India because they also want to diversify their alignment of strategic & commercial partners," says Kanchi Gupta, Researcher on West Asia at the Observers Research Foundation in New Dehli.

​Nevertheless, signing of a contract on the first phase of development of Iran's Chabahar Port will top the Indian Prime Minister's agenda as it will become a symbol Indo-Iran economic and strategic cooperation. It will also give India access to Afghanistan, bypassing Pakistan entirely. The Chabahar port is also likely to help India receive natural gas imports from Russia. India's strategic planners also view the port as a strategic counterweight to China's pursuit of a port in Pakistan's Gwadar.

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The Indian External Affairs Ministry said that they will push for development of two terminals & five births which will have multi cargo capacity. India will invest 200 million dollars in first phase of the project, which they believe will be a game changer, especially for Afghanistan because it will provide an alternative route for trade with India.

Apart from bilateral engagements between India and Iran, Afghanistan will also be pitching in for a "trilateral agreement on transport and transit corridor." According to the Indian Ministry of External Affairs the trilateral agreement among India, Afghanistan & Iran will be signed on May 23. "It will highlight the significance India attaches to developing connectivity using Chabahar as regional hub." 

​However, just this past week, Afghanistan joined China's ambitious "One Belt, One Road" initiative, aimed at interconnecting major economies in Asia & Europe through infrastructure, investment & trade. Also, China has agreed to provide 500 million yuan (USD 76.7 million) of aid gratis to Afghanistan for mutually agreed projects. 

Kanchi Gupta said, "Afghanistan has since very long time looked at India as potential player in their country. But, we haven't moved beyond some humanitarian assistance, disaster relief and sometimes we have talked about training their forces but we haven't actually actively developed Afghan policy and actively supported the government, or played the large role. Whereas, Chinese investment in Afghanistan is rising. Economic development will be a very large factor in the stability of the country, so they will obviously look at China as a potential partner in their economic development and stability, which is a role India has not really stepped up commensurate the interest from Afghanistan." 

Against this backdrop, Prime Minister Narendra Modi's Iran visit starting May 22 will be a litmus test not only for India's desire to establish global influence but also its balancing act in regional politics.