India hopes for upswing in Iran relations, deploys Ansari power

ansar-tehranAmid speculation of a possible Iran-West rapprochement under the new dispensation in Tehran, India has signalled its intention to revitalise bilateral ties by sending Vice-President Hamid Ansari for the swearing-in ceremony of the new Iranian president.

The election of Hassan Rohuani, a reformist moderate cleric who enjoys confidence of Iran’s Supreme Leader Ayotallah Ali Khamenei, has rekindled hopes for steadying and expanding New Delhi’s relations with Tehran, which have been challenged by the onslaught of the US-EU sanctions.

Ansari was among a galaxy of leaders who attended the August 4 oath-taking ceremony of the new president in Tehran, which included, among others, Afghan President Hamid Karzai, Pakistan’s President Asif Ali Zardari, Iraq’s Vice President Khazir al-Khazai and Syrian Prime Minister Wael al-Halqi.

The Ansari Power

ansari-presidentAnsari was the perfect choice for messaging the new powers-that-be in Tehran that India seeks to imbue its Iran ties with a  fresh vision and momentum that will not be deterred by prescriptive hectoring emanating from Washington and the European capitals. Earlier, India was planning to send External Affairs Minister Salman Khurshid, but it was decided to upgrade India’s representation to send a clear signal to Tehran about New Delhi’s desire to deepen bilateral ties.

Ansari, a former ambassador of India to Iran, is known for his enduring friendships and network of admirers among power circles in Tehran who recalls his ambassadorial tenure with much fondness. Ansari’s scholarly knowledge and extensive diplomatic experience in the region, that also includes a distinguished stint as India’s ambassador in Riyadh, promises to provide additional heft to India’s new Iran diplomacy.

India’s Iran policy-makers have been closely monitoring foreign policy orientation of the new Iranian president which seems to suggest that unlike his abrasive predecessor, Rouhani, a former nuclear negotiator, will display greater flexibility and statesman-like quality in seeking a deal with the US over Tehran’s contentious nuclear programme. The 64-year-old Iranian leader has also signalled his desire to ease relations with Saudi Arabia, the Gulf world’s influential country which is the largest oil supplier to India and is home to a large Indian diaspora.

The Gulf region is crucial to India’s energy security as it provides over 70 per cent of the country’s oil imports and is home to 6 million-strong Indian diaspora which contributes over $50 billion in annual remittances

If Rouhani manages to turn around Iran’s strained ties with both Washington and Riyadh, it will remove the twin hurdles and could have a major force-multiplier effect on India’s relations with Iran which are entwined by centuries-old civilizational ties and a congruence of strategic and energy interests.  In an assertion of the country’s independent foreign policy, India has managed to deftly fend off the US pressure and has managed to keep balance in its relations with Tehran.

For now, the desire for stronger relations is reciprocal. Setting the stage for what could be a new phase in bilateral ties, Ansari held talks in Tehran August 4 with Iran’s new president and Ali Larijani, the influential Speaker of Iran’s Majlis (parliament) during which the two sides discussed a host of steps to galvanise their multi-faceted relationship.

Economic Diplomacy

Iran, which was India’s second largest supplier of oil, has now slipped to the sixth position due to logistical complications arising out of the US and EU sanctions. India’s position remains that it is not bound by unilateral sanctions, but only by the UN sanctions.  However, the practical difficulties related to payment and insurance of tankers have left Indian refineries with no choice but to cut down on Iranian oil imports. With the US-EU sanctions shutting down dollar payment routes, India is now paying for Iranian oil in Indian rupee.

Since economic diplomacy is the name of the game, India is looking to scale up bilateral trade and investment with Iran, partly as a payment mechanism for Iranian oil and partly to address the surging trade imbalance. Currently, India-Iran bilateral trade is estimated to be over $15 billion in which Iranian imports account for $12.5 billion. Iran has sought greater Indian investment in a range of areas, including petro-chemicals, construction, IT and infrastructure.

Afghanistan Factor

India’s Iran diplomacy is not just driven by the country’s quest for energy security. Given Tehran’s influence in Afghanistan, India is engaged in proactive consultation with Iran to stabilise Afghanistan in in the run-up to the withdrawal of foreign combat troops from Afghanistan in 2014 and beyond. India has pledged $100 million investment to fast-track the construction of the Chabahar port, which will open an alternative gateway to Central Asia and beyond.



Author Profile

Manish Chand
Manish Chand
Manish Chand is Founder-CEO and Editor-in-Chief of India Writes Network ( and India and World, a pioneering magazine focused on international affairs. He is CEO/Director of TGII Media Private Limited, an India-based media, publishing, research and consultancy company.