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Iran and it's strategic importance for Bharat

Niranjan Bhombe

Soham Athavale

27 June 2023

"Bharat and Tehran had good diplomatic relations since long back. This dates back to the Indus...."

....valley civilization. Recently post 2018, US withdrawal from Iran nuclear deal Bharat Iran relationship was hampered. But the current visit of National Security Advisor of Bharat Ajit Doval showed signs of improving Bharat - Iran relations.

As mentioned above Bharat had a healthy and consistent relationship with Iran. This was initially hampered in 2012 when US imposed sanctions on Iran and warned Bharat not to buy oil in exchange of dollars. To counter this Bharat developed Rupee Rial currency system. This meant Bharat was buying oil in exchange of Bharatiya Rupee. Later this system was discontinued due to the directions given by Hillary Clinton to the then Bharatiya Government. But later Iran Nuclear deal was signed and sanctions were lifted.

Around 2017, Bharat undertook development of Chabahar Port and its surrounding industrial complex. This project was near completion and United States again imposed sanctions on Iran in 2018. Due to this the port was operational but was never used.

In 2020 Covid – 19 arrived. Iran faced the heat of poverty as it had sanctions. During Russia – Ukraine war Bharat was buying oil from Russia through a Rupee – Rubble trade system. Iran again offered Bharat to buy oil in Rupee – Rial Trade system. But Bharat was not ready. This made Iran unhappy. It’s discontent was clearly visible through its condemning of Bharatiya decisions at Global Forums. Finally in 2023 Bharat making moves to establish trade relations again.

Iran is strategically important for Bharat. It is located at the strait of Hormuz. Nearly 30% of world’s total oil traffic passes from this region. Bharat’s Chabahar port is 300 km from strait of Hormuz. Iran provides an alternate and closer route to Europe and Central Asia. This can boost Bharat’s trade and commerce.

Bharat is planning to develop a Chabahar port industrial complex. It is an industrial zone around the port. Bharat and Iran had signed an agreement in 2016 to develop this port industrial complex. Iran has promised to supply cheap natural gas and Bharat has promised to establish industries. As per the agreement Bharat has established an aluminum smelter and a urea plant.

Chabahar port offers access to Afghanistan and its lately discovered resources. Bharat has undertook a project to develop a railway line from Chabahar to Kabul along with Iranian Railways. Bharat is planning to build a railway line from Moscow to Chabahar. This line will give access to various central Asian countries. Bharat is planning to develop trade ties with these central Asian countries.

With the Tehran visit of NSA once again we can expect progress in this project. Rest all the time will tell us.




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