India’s traditional relationship with Iran is finally being stretched by our strategic closeness to the US and is pushing that nation directly into the arms of China. And this might cost us a project that we had heavily invested in, the Chabahar port. For now, the Iranian Government has decided to drop India as a partner for the construction of a rail line from Chabahar port to Zahedan, along the border with Afghanistan, and go on its own. It will use its own engineers and not consult Indian expertise either. This, it claims, is because of India’s tardy initiative and not moving any funds although an agreement was signed four years ago. India has been stalling under the shadow of US sanctions, which seek to penalise countries doing business with Iran. According to reports, Iran, which wants to complete the line by March 2022, will use $400 million from the Iranian National Development Fund. And despite a pandemic-hit economy, it is going in for massive spends simply because China has signed a 25-year economic and security partnership with it worth $400 billion. This entails Chinese entry in banking, telecommunications, ports, railways and other infrastructure projects. It fulfils China’s neo-imperialist desires, colonising another economy in the process, and keeps its domestic industries running with cheaper Iranian oil for the next 25 years. India, by comparison, has stopped importing Iranian crude oil under US pressure. The agreement also proposes military cooperation, which could make China a key player in regional geopolitics and counter the US.

India has been completely caught off guard by this deal even as it tried various rounds of negotiations with the US to spare it from sanctions for conducting certain businesses with Iran. Though India got exemption for the Chabahar port and the rail link, equipment suppliers feared a hitback and slowed down progress. Besides, Iran was upset by India’s decision to completely stop energy imports, quite a big basket of its earnings. Now China has assured it of its oil market, picking up supplies for 25 long years, taking away Iran’s worries. Bilateral ties with Iran nosedived further with the naked display of majoritarian politics during the Delhi riots in February with its Foreign Minister Javad Zarif strongly condemning them. Now there is talk of a greater Chinese stake, the deal merely an access card to Chabahar’s duty free zone, an oil refinery and the port itself. In fact, though Iran has denied it, there is speculation that it could lease out the entire port to its new benefactor. That would be a big blow to India, which had hoped to build an alternate trade route from Chabahar to Afghanistan and Central Asia, bypassing Pakistan. But now with the Chinese reclaiming the vacuum, it will strengthen the China-Pakistan axis around the coast. The China-Pakistan Economic Corridor (CPEC) and the Gwadar port will strengthen that conduit. Iran says it has not abandoned India, but clearly it has decided to go with the biggest Asian power and the US’ arch enemy on a need-based formula. We may think that we forced China’s hand by retaliating in Galwan but all it did was ensure strategic calm when world opinion would have isolated it further had it escalated its aggression. As the only country whose growth projections are not negative post-pandemic, it can afford to buy out vulnerable nations. It has already invested in banks in Brazil. India may be its economic bulwark but China is quickly encircling it by winning over our old allies and neighbours. It is no less belligerent, just that it has now launched an economic warfare with India.  

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The views expressed in the Article above are Author’s personal views and kashmiribhatta.in is not responsible for the opinions expressed in the above article.

Courtesy: Pioneer: 16th July, 2020