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Engaging Iran in the New StrategicEnvironment: Opportunities andChallenges for IndiaMeena Singh Roy & Ajey Lele

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Strategic AnalysisVol. 35, No. 1, January 2011, 88–105

Engaging Iran in the New Strategic Environment: Opportunitiesand Challenges for India

Meena Singh Roy and Ajey Lele

Abstract: In recent years, Iran has come to acquire a significant place in the WestAsian region with the ability to influence regional politics. For India, relations with Iranare vital. In the changed strategic environment, both India and Iran have been work-ing towards improving their bilateral relations. However, there are several challenges,especially for India, in this regard. If the Iran–US confrontation intensifies, for example,India may find it difficult to pursue a smooth relationship with Iran. This article looksat various facets of India–Iran relations and examines the opportunities and challengesthat lie ahead.

India and Iran are two important players in Asia and the world today. There isgreat potential for meaningful cooperation between them in the energy, trade and

economic sectors. They can also play a constructive role in regional politics andcontribute towards regional peace and harmony. But how meaningful such cooperationwill be in the new strategic environment in the region is the question that is examinedin this article. There are several challenges on the way, which may preclude thepossibility of a smooth and harmonious relationship between these two countries.The new developments at regional and global levels will undoubtedly have profoundstrategic implications on Indo-Iran relations. After the June 2009 elections, the mostcontroversial since the 1979 revolution, there is a new government in Tehran withMahmoud Ahmadinejad backed by the Supreme Leader1 having been elected presidentfor the second term.2 It seems unlikely that the current regime in Tehran will introduceany major change in its position on regional and international issues affecting Iran.There may be some minor re-adjustments in Iran’s foreign policy, but no major change.It is likely to continue to focus on consolidating its regional position and relations inWest Asia; seeking a new strategic relationship with Asian countries and deepeningits relations with the European Union to counterbalance US domination in the region.

In post-election Iran, the political tussle within the ruling elite is still on, but howthis divide is going to impact the future course of political development is still not veryclear. There is an uneasy balance between the two components of the Islamic republic’spolitical structure: constitutional democracy and theocratic rule. The reformist factionof the establishment supports theocratic rule, but views it as ultimately subordinate tothe constitution and the sovereignty of the people. However, the hard-line wing, whichincludes the ‘principalist’ clerics and the Islamic Revolutionary Guards Corps (IRGC),regards theocratic rule as superior to the republican aspect of the Islamic republic.3 In

Meena Singh Roy and Ajey Lele are Research Fellows at IDSA.

ISSN 0970-0161 print/ISSN 1754-0054 online© 2011 Institute for Defence Studies and AnalysesDOI: 10.1080/09700161.2011.530986http://www.informaworld.com

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early 2010, the Iranian regime came down heavily on the protestors on the streets ofTehran and neutralised the opposition. The strongest blow to the reformist oppositioncame in April 2010, when two prominent reformist factions4 were suspended by anorder issued by the Interior Ministry, which held that these two groups were workingagainst national interests. According to Iranian media reports, this suspension is likelyto be upheld by the Judiciary.5 This will leave the authority in Iran firmly in the hands ofhardliners for the foreseeable future. Iran’s elite IRGC has full control over the situationand has become more powerful.

At the regional level, developments in the Afghanistan-Pakistan (Afpak)6 regionare worrisome. Tehran is looking for a greater role not only in Iraq but also in theAfpak region. It has decided to increase its diplomatic presence in Afghanistan afterPresident Ahmadinejad’s visit to Kabul in March 2010. The Iran-US stand-off on thenuclear issue has added a new dimension to the existing situation in the region. SincePresident Barak Obama’s initial gestures to engage Iran have not had the desired result,a new phase of confrontation between Iran and the US has started unfolding.

It is in the context of this changing geo-political environment that this article seeksto examine various facets of India–Iran relations. It argues that despite many ups anddowns in India–Iran relations and their efforts to improve bilateral equations, therewill be numerous challenges for India in its future relations with Tehran. If the Iran–US confrontation intensifies, India will be confronted with difficult diplomatic choiceswhile dealing with Iran. Any attempt to take the relationship forward must involve newmechanisms and follow a clear understanding of each other’s national interests, whichwill help bridge the current gap between the two countries.

Regional milieu

Iran has been able to carve an important role for itself in the region since 2005–2010.Its role in ensuring security in the Persian Gulf is undeniable. West Asia, part of India’sextended neighbourhood, is not only the major source of energy supplies to India,but also home to a large Indian expatriate population. About five million Indians areinvolved in economic activities in the Persian Gulf. As a source of remittances andenergy supply, India has big stakes in peaceful transition in these areas.7

Iran has an ability to influence West Asian politics. It has a strong military and evenif it does not have advanced Western arms and equipment, it has a robust indigenousdefence production industry and a strong domestic industrial base. It has also beenconducting major military exercises to project its military power in the region. Thelatest three-day exercise, conducted from April 23, 2010 in the Persian Gulf, was aimedat preserving the security of the Persian Gulf and the Strait of Hormuz, which is a keyeconomic and energy route. While the exercise was on, Brigadier General Ali-RezaTangsiri, the spokesman of the IRGC, invited several regional countries to take partin such military exercises in the future.8 These military manoeuvres signal Tehran’spreparedness to counter any aggression against its territory. They are also meant tosuggest to the regional countries that Iran, along with others, can secure the Gulf andthe Strait of Hormuz without the presence of foreign forces.

Iran’s political influence in the Shi’a Crescent from Bahrain in the south, throughpost-Saddam Iraq to the Beka’a valley of Lebanon has been rising significantly.Iran also has an important role to play in Central Asia along the Caspian Sea andAfghanistan. Essentially, Iran’s key motive has been to undercut the ability of the US tocontain it.9 Apart from enhancing cooperation with the Muslim states, Tehran has tried

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to widen its relations with major countries like Russia, China, Europe and India, andcontinued to strengthen its engagement with regional and international organisations,which are not susceptible to Western domination, such as the Economic CooperationOrganisation (ECO), Organisation of Petroleum Producing Countries (OPEC) and theShanghai Cooperation Organisation (SCO).

In Lebanon, a new national unity government has come to power with the supportof Iran’s allies, i.e., the Hizbollah and Amal. Iran has deepened its relationship with thePalestinian Islamic groups, providing them with funds and military help to consolidateits position. In Iraq, Tehran has pursued a consistent diplomacy of engagement with thetwo major government factions—Nouri Al-Maliki’s al-Dawa Party and the SupremeIslamic Iraqi Council (SIIC)—and has successfully mediated in their disputes.10 In theIraqi elections on March 7, 2010, neither the Iraqiya Alliance, led by former PrimeMinister Ayad Allawi, nor the State of Law Alliance, led by Prime Minister Nouri al-Maliki, won enough votes to form the government alone. Therefore, both the politicalgroups have been working hard to form a partnership to win control of the parliament.In the process, they are courting support from Iraq’s neighbours in West Asia, whohave influence on Iraqi political parties. For example, Allawi’s Iraqiya Alliance hasbeen trying to engage Tehran, despite his criticism of Iran’s influence in Iraq during theelection campaign. A delegation of Iraqiya Alliance sent to Tehran has even promisedthat if they came to power they ‘will not allow the use of Iraqi land and airspace forlaunching an attack on neighbouring Iran’.11

Iran’s relations with neighbouring Turkey have also improved and the latter isreportedly keen to play the role of mediator between Iran and the US. Iran is eagerto enhance its presence in Afghanistan’s sensitive border province of Nimroz, whichborders Iran’s Sistan-Balochistan province. It has been badly hit by cross-border move-ment of drugs and militants into the Sistan-Balochistan province. According to Iranianofficials, Iran is planning to open its consulate in Nimroz province soon. Zaranj, thecapital of Nimroz province, is also important for Iran’s trade with Afghanistan. In fact,goods can be taken from the Iranian port of Chabahar to Afghanistan using the 215-kmhighway from Zaranj to Delaram (incidentally built by India). The diplomatic activitiesamong Iran, Afghanistan and Pakistan have also been intensified. These developmentsare indicative of Iran’s increasing role in the Afpak region where India has strategicinterests.12 Given Iran’s potential to play a critical role in the region, its significancefor India is undeniable.

Changing nature of India–Iran relations

Iran’s relevance for India lies in its geographical location, size, hydrocarbon reservesand its converging interests as a Shia Muslim majority state (India has a large ShiaMuslim population) vis-à-vis a Sunni-dominated Pakistan. Moreover, it can provide analternative route for trade and commerce with the Central Asian states. More impor-tantly, its potential to play a pivotal role in a number of regional configurations, mainlyin the Persian Gulf, Afghanistan and the Caspian Basin area, enhances its significancefor India.13

Historically, the Indian leadership has underlined the strategic importance of Irandespite differing perceptions on a number of issues. In the initial years after indepen-dence, India tried to develop cordial relations with Iran. However, since Iran was closerto the US and part of the Western military alliance during Shah’s reign (1941–1979)

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and India pursued a non-aligned policy, Indo-Iran relations never matured. After theIslamic revolution in 1979, India’s ties with Iran remained minimal.

After the death of Ayatollah Khomeini in 1989, the Soviet withdrawal fromAfghanistan, the disintegration of the Soviet Union leading to end of the Cold Warand the 1990–1991 Kuwait crisis, India and Iran came together because of their com-mon security interests. This was followed by a phase of renewed engagements with anumber of high-level visits by both sides to improve bilateral relations. The changedsecurity paradigm persuaded Iran to enhance its ties with India.14 Former Indian primeminister P.V. Narasimha Rao’s visit to Tehran in 1993 was a turning point in the India–Iran bilateral relationship. These ties were further strengthened during the formerprime minister Atal Bihari Vajpayee’s visit to Iran from April 10–13, 2001. During thisvisit, the ‘Tehran Declaration’15 and several important economic and trade cooperationagreements were signed.

Strategic cooperation between India and Iran received a further boost during formerIranian President Seyyed Mohammad Khatami’s visit to New Delhi in January 2003,which culminated in the signing of the ‘New Delhi Declaration’.16 The declaration notedthe urgency of ‘enabling legislations to promote vigorous trade and economic exchanges’as ‘primary requirements to promote business confidence between the entrepreneurs ofthe two countries’.17 The initiative of enhancing cooperation in the economic, energy,political and security arenas was taken up during subsequent high-level visits by bothsides. President Ahmadinejad visited New Delhi in April 2008. This was followed byexternal affairs minister Pranab Mukherjee’s visit to Tehran in November 2008 and areciprocal visit by Iranian foreign minister Manouchehr Mottaki in November 2009.During these visits, several documents were signed to strengthen and cement the existingties between the two countries. External affairs minister S.M. Krishna’s four-day visit toTehran in May 2010 was another step towards improving bilateral relations. During thisvisitKrishnametPresidentAhmadinejadanddiscusseddevelopmentsintheAfpakregionin addition to bilateral, regional and international issues of mutual concern. PresidentAhmadinejad described India as ‘a global leader and an economic powerhouse’.18 ThismeetingassumessignificancebecauseduringPranabMukherjee’svisit in2008, therewasno meeting between him and President Ahmadinejad.19

A critical analysis of Iran’s foreign policy during President Ahmadinejad’s periodreveals that Tehran’s focus has been more on developing ties with Islamic countries andstrengthening and enhancing its influence in the Gulf region.20 In the current foreignpolicy priority of Iran, the Peoples Republic of China (PRC) occupies a special place.Its presence in the economic and energy sector is increasing. Iran looks at China asits greatest pillar of support. This is driven by two factors: China’s increasing energydemands, which make Tehran an indispensable partner, and their mutual opposition toUS primacy in world affairs. From Iran’s point of view, China is an important regionalpower and a permanent Security Council member that can perhaps provide support toIran when it finds itself isolated. Therefore, China is likely to get high priority in Iran’sfuture foreign policy scheme. However, developments in the last five years do indicateIran’s desire to cooperate more closely with India despite their apprehensions aboutIndia’s increasing ties with the US and Israel.

Trade relations

Economic cooperation between the two countries is moderate. India and Iran holdregular bilateral talks on economic and trade issues under the Indo-Iran Joint

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Commission Meeting (JCM) at the Foreign Ministers’ level. The 16th session of theJCM was held in New Delhi on July 8–9, 2010. This meeting was significant asit provided an opportunity for both the sides to review bilateral economic and cul-tural cooperation. Six Memoranda of Understanding (MoUs)/agreements were signedduring this JCM. These were: Air Services Agreement; Agreement on Transfer ofSentenced Persons; MoU on Cooperation in New and Renewable Energy; MoU onCooperation in Small Scale Industry between National Small Industries Cooperation(NSIC) and Iranian Small Industries and Industries and Industrial Parks Organisation(ISIPO); Programme of Cooperation on Science and Technology; and an MoU onCooperation between the Central Pulp and Paper Research Institute of India and theGorgan University of Agricultural Science and National Resources (GUASNR).21

Though many agreements have been signed, they are yet to be implemented. If oneexcludes crude oil from India–Iran relations, then the relations would amount to whatIran’s relations are with Bangladesh. Although trade with Iran has been increasing, itis much below the economic potential of the two countries. Total trade has gone upfrom US$1,184 million in 2003–2004 to US$12,887 million in 2007–2008. However,in percentage terms, it is only 4.35 per cent of India’s total trade in 2007–2008.22

In 2008–2009, the trade amounted to US$14,910 million (see Appendix I). In April2008, both President Ahmadinejad and Prime Minister Manmohan Singh agreed thatthey would try to triple bilateral trade between the two countries.23

Despite the great potential of increasing economic cooperation, India faces somedifficulties in enhancing trade cooperation with Iran. Today, Iran’s economic rela-tions with the external world remained limited. Foreign companies are coming underincreasing pressure to cut ties with Iran because of its nuclear activities. Already, theUN Security Council has imposed a stringent set of economic sanctions on the country,with the US and the EU also imposing sanctions on the country’s oil and gas sector.While the impact of these sanctions is yet to be seen, Iran’s economy is expected tocome under severe strain in the coming days. Under the Obama administration, thereis increasing pressure on many companies to cut business or end their affiliation withIranian firms. Though initially the US focused on financial institutions, its attention hasnow expanded to manufacturers and service providers. The two major US accountingfirms, PriceWaterhouseCoopers and Ernst & Young, disclosed in April 2010 that theyno longer have any affiliation with Iranian firms. Many other companies, like GeneralElectric, Huntsman, Siemens, Caterpillar and Ingersoll Rand, have also announced thatthey would stop sales, cut back business or end affiliation with Iranian firms. Daimlerhas said it would sell its minority share in an Iranian engine maker.24

Energy dynamics

Energy is undoubtedly the common meeting point for India and Iran. Tehran, with itshuge hydrocarbon resources, and New Delhi, with its increasing demand for energy,can be partners in carrying forward the existing cooperation in the energy sectorto more meaningful levels. According to a 2006 Energy Information Administration(EIA) report, Iran’s oil reserves increased by five per cent from 125.8 billion barrels(bb) in 2005 to 132.5 bb in 200625 and as per 2009 EIA reports, Iran has 136.2 bb ofoil reserves, with Saudi Arabia having the most at 266.7 bb and Canada the secondlargest at 178.1 bb.26 Iran holds the second largest gas reserve estimated at 992 trillioncubic feet (tcf) after Russia, making it the largest natural gas producer in West Asia.The largest natural gas development project in Iran is the offshore South Pars fields,

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discovered in 1990, estimated to contain between 350 tcf and 490 tcf of reserves. Iranhas set a goal to raise natural gas production to between nine tcf and 10 tcf per yearby 2010. This amounts to more than double its 2006 marketed production of 4.4 tcf.However, given the sanctions imposed on Iran, this target may be difficult to achieve.27

In addition, Iran has the second largest deposits of copper, the largest deposit of zincand the ninth and tenth largest deposits of iron ore and uranium, respectively.28

Iran’s importance for India’s energy security is undisputable. India’s imports ofcrude oil and petroleum products in 2007–2008 were worth US$10.96 billion and itsexport of gasoline to Iran was worth US$850 million.29 India is the third largest buyerof Iranian crude oil. More than 12 per cent of India’s oil imports come from Iran. Indiahas signed an agreement with Iran to purchase five million tonnes of liquified naturalgas (LNG) per annum for 25 years from the second half of 2009. This agreement,however, could not be implemented due to a dispute over prices. Some media reportsattribute India’s vote against Iran at the IAEA as the cause for non-implementationof the LNG deal. However, Indian and Iranian officials are of the view that this dealcan be renegotiated. During the recent visit of Iran’s national security chief Sa’id Jalilito Delhi, prime minister Manmohan Singh said that energy cooperation was the mostimportant area for expanding economic ties between India and Iran.30

On the Iran–Pakistan–India (IPI) gas pipeline, India continues to reiterate its inter-est to take part in the project. Due to technical, security, political and pricing problems,the deal has been on freeze for almost three years. India has not been attending tri-lateral meetings since 2007. In this context, the Iranian ambassador in India said inFebruary 2010 that while the doors are open to India to join the IPI, Iran will notwait indefinitely.31 Iran and Pakistan have signed the final agreement in Turkey in May2010 to launch the Iran–Pakistan gas pipeline, with a provision for India to join theproject at a later stage. Both countries have signed the operational agreement and theheads of agreement. The latter deals with details regarding the transportation of gas toIndia, if it joins the project. Under this provision, Pakistan will have the right to chargetransit fees for transportation of gas to India calculated in accordance with interna-tional practices.32 In March 2010, India indicated its willingness to hold talks on theIPI project. On the sidelines of the 12th International Energy Forum, India’s petroleumminister Murli Deora met Iran’s deputy minister of international affairs H. NoghrehkarShirazi and proposed bilateral talks in May 2010. India proposed the meeting of theJoint Working Group of both the countries on the pipeline project and is waiting forTehran to decide the dates.33 Tehran has yet to respond to this proposal. During theforeign minister’s visit in May 2010, it was conveyed to the Iranian officials that India’smain concerns on the project relate to security of the pipeline that will pass throughthe volatile Baluchistan province in south-western Pakistan, as well as differences overpricing.34

In the oil and gas sector, India’s ONGC Videsh Ltd (OVL) has successfully executeda contract to explore the Farsi oil block. It was awarded the development contract forthis block in November 2008 and it submitted the development plan in 2009. OVL isinterested in exploration and development of Phase 12 of the South Pars and Azadeganoilfields. In December 2009, after tough negotiations, Iran signed an agreement withOVL and ALPS (Hinduja Group) combined, providing a 40 per cent stake in thisproject. ONGC and ALPS, along with Petronet LNG, have also signed a pact to buy a20 per cent stake in Iran’s LNG, that is building a $4.32 billion plant on the southerncoast to convert gas from SP-12 into LNG for export. Phase 12 is the largest of 28phases in which the South Pars gas field in the Persian Gulf is divided. According to

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some media reports, SP-12 is expected to produce three billion cubic feet of gas perday and two-thirds of this will be converted into LNG for exports. However, the IEAreport of 2009 indicates that each phase is expected to produce one billion cubic feetper day.35 Iran has offered to sell six billion tonnes of LNG per year to India. Petroparsis a subsidiary of the National Iranian Oil Company, which will hold a 40 per cent stakein SP-12 and the remaining 20 per cent will be with Sonangol of Angola.36 A consor-tium of three Indian companies—ONGC Videsh Ltd., Indian Oil Corporation Ltd. andOil India Ltd.—has plans to invest about US$5 billion to develop Iran’s Farzad gasfield in the Persian Gulf.37

The oil and gas sector offers possibilities of setting up mutually beneficial projects.India and Iran have successfully collaborated in the past in setting up the MadrasRefinery project, the Kudremukh iron ore project and the Madras Fertiliser project,as well as the Irano-Hind Shipping Company. Iran can possibly invest in the energysector in India, such as in an oil storage facility. The early conclusion of the dou-ble taxation avoidance agreement, bilateral investment promotion and protectionagreement and the preferential trade agreement will facilitate investments and jointventures.

While there is some forward movement in terms of cooperation in the oil andgas sector, there are some challenges which may limit future cooperation. What isimportant to note here is that Iran does not have the LNG technology and its currentstand-off with the West on its nuclear programme may limit its future capability infulfilling the LNG deal without the support of Western oil giants, who can providesuch technology. Under international pressure, many firms have pulled out of Iran’soil and gas sector. An Italian firm said it would pull out after its current gas contractended. The Malaysian state oil company cut off gasoline shipments to Iran, follow-ing similar moves by Royal Dutch Shell and trading giants like Vitol, Glencore andTrafigura.38 On March 24, 2010, Russia’s largest private oil major, LuKoil, has alsosaid that it was suspending the Anaran oil project in Iran because of sanctions imposedby the US although it retained its rights in the project and would return under morefavourable economic conditions. It was reported that the company had to suffer theloss of some $63 million due to sanctions.39 Soon, India will also be confronted withpressure from the US. In March 2010, the US Government Accountability Office madepublic a report naming five Indian companies as part of a list of 45 foreign firms help-ing Iran’s oil and gas sector. These companies were IOC, ONGC, OVL, Oil India Ltdand the government sponsored private company, Petronet LNG and UK-based HindujaGroup. Reliance Industries, which used to refine Iranian crude and was the main sup-plier of petrol and diesel to Iran until 2009, had to back out from trading with Iranunder US pressure. Although New Delhi has so far avoided this issue, it will be con-fronted with difficult choices in the future when Iran–US confrontation intensifies.As per the provisions of the Iran-Libya Sanctions Act, the US can penalise compa-nies from third countries, which invest more than $20 million in Iran’s hydrocarbonsector. This has led to stronger ties between China and Iran, and provided Russiawith greater opportunities to sell more gasoline while hurting suppliers in Europeand India. China’s National Petroleum Corporation has major investments, estimatedto be more than $2 billion, in Iran’s oil sector.40 China has a growing presence inIran’s economic sector. China is non-committal on the issue of economic sanctions onIran as it believes that dialogue is a better way to deal with the Iranian nuclear issue.

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Iran: a gateway to Central Asia

Iran’s significance for India also lies in its strategic location. Iran can be a gatewayto Central Asia for India. Moreover, the evolving situation in Central Asia attractsthe attention of policy makers in both Tehran and New Delhi. Both countries haveobserver status in the SCO. To increase connectivity, both countries have taken severalsteps. Way back in April 1995, a trilateral MoU on trade and transit to facilitate theuse of Iranian and Turkmen territory for trade with other Central Asian countries wassigned.41 Two years later, in February 1997, a tripartite agreement on international tran-sit of goods between Turkmenistan, India and Iran was signed in Tehran.42 However,the full potential of this route is yet to be realised. This requires greater initiative bythe signatory countries. India and Iran are signatories to the International North–SouthTransport Corridor (INSTC) agreement signed in 2000 that provides for the transit ofgoods through Iran and the Caspian Sea to Russia and Northern Europe. The poten-tial will be manifold, with India, Myanmar and Thailand also getting linked by road.This will boost trade between Europe and South East Asia as well. As compared tothe route through the Suez Canal and the Mediterranean Sea that is currently used, theINSTC is much shorter and more cost-effective.43 The Suez Canal route takes 45–60days whereas this route will take 25–30 days. In fact, the INSTC is 40 per cent shorterand 30 per cent cheaper. From India’s point of view, the North–South Corridor notonly helps India bypass Pakistan and yet reach out to Central Asia but also enables itto transport goods at a cheaper cost to European markets (see Map 1).44

Map 1. International North–South Transport Corridor.

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Despite various initiatives, the North–South Corridor has not been utilised by mem-ber countries to its full potential for a number of reasons. Firstly, there is a need toupgrade the rail and road networks and other related infrastructure within the memberstates of the INSTC. This demands heavy investments by member countries. Secondly,the North–South corridor runs through the politically unstable Caucasus region. Fewwill be willing to send cargo through conflict-ridden Chechnya or Dagestan. Besides,some Western countries are reluctant to opt for a route that runs through Iran. Inaddition, for the expansion of this route, stability in Afghanistan is also an impor-tant factor. Finally, it will take some years for shipping companies to risk putting theircargo through an unexplored passage.

In addition to the aforesaid, the trilateral agreement between the governments ofIndia, Iran and Afghanistan to develop the Chabahar route through Melak, Zaranj andDelaram can facilitate regional trade with Afghanistan and Central Asia, thus con-tributing towards enhanced regional economic prosperity. In April 2008, during thevisit of the Iranian president to Delhi, the issue of Chabahar Port and the railwayup to the border with Afghanistan, which would give India another means of transitto Afghanistan and Central Asia, was discussed.45 India is interested in investing inthe Chabahar container terminal project as well as the Chabahar–Faraj–Bam railwayproject. It has proposed expanding the capacity of the port, currently working at itsfull handling capacity of 2.5 million tones of cargo per year from two active berths, byfive times and linking it to the Iranian town of Bam with a railway line. From Bam,which is on the Afghan border, goods can be taken through the Zarang-Delaram roadwhich is linked up with the garland highway connecting all major Afghan cities.46 The

Map 2. Zaranj–Delaram Route.

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importance of this project was recently highlighted by India’s foreign secretary by not-ing that the Chabahar project is ‘at the heart of the common vision that India and Iranhave for Afghanistan and the region as a whole, of increased and easier flow of goods,and creation of a network of transport routes and energy pipelines that will bring ourpeople together in an arc of stability, prosperity and peace’.47 India has already com-pleted 200 km of road in Afghanistan, linking Zaranj and Delaran (which connectsto the Iranian border). This route reduces the distance from India to Central Asia by1,500 km. There is also the possibility to extend this road to Tajikistan and Uzbekistan.If this project is carried forward by India and Iran, this will improve regional trade andtransit (see Map 2).

In April 2008, another important initiative was taken by both countries when Indiaand Iran signed an agreement to establish a new rail link between Iran and Russia. TheMoU was signed by Indian Railway Board chairman K.C. Jena, and managing directorof Iran’s Railway Company Hassan Ziari. India offered assistance to Iran in the fieldof technical training of personnel, railroad signalling projects as well as the supply oflocomotives and spare parts. It is argued that this is an elaboration of the North–SouthCorridor.48 The first meeting of the bilateral Joint Working Group on Railways heldthereafter in Tehran in May 2008 has identified specific areas of cooperation, includingsupply of locomotives, participation of Rail India Economic Services (RITES) andIRCON in electrification, signalling and development of dry port/inland containerterminals.

Afpak quagmire

Iran and India share common concerns in the Afpak region. Both India and Iran havecontributed in the past (through the Bonn process) to bringing stability to Afghanistan.India, Iran and Russia have supported the Northern Alliance in the past. Today, thedeteriorating internal situation in Afghanistan and Pakistan is of serious concern toboth India and Iran. Developments in Afghanistan have serious implications for Iran.Currently, three million Afghanis are living as refugees in Iran—one million legallyand two million illegally.49 This has created a major law and order problem in theregion, adding to the menace of drug trafficking, arms proliferation and other relatedissues with Afghan refugees.

Both India and Iran are apprehensive about the Taliban-al Qaida coming backto power in Afghanistan. At the moment, the US is looking for an exit policy inAfghanistan and seems to be providing a greater role to Pakistan in the process of‘re-integration and reconciliation’ of the Taliban as a solution to the Afghan quagmire.The Iranian ambassador to India, Syed Mehdi Nabizadeh, said in February 2010 thatthere was no good or bad Taliban and their return would further worsen the securitysituation in the region. India and Iran have a different viewpoint on troop surge inAfghanistan. Iran is opposed to such a move while India is not. India sees Iran as animportant ally in Afghanistan and views its help as crucial to ensure that elements hos-tile to India do not get a free run in Afghanistan, allowing Pakistan get strategic depthagainst India when NATO forces leave Afghanistan. It is argued that Iran, Russia andeven China are important for India to keep the Taliban from playing any major role inAfghanistan.50

Currently, there are continued consultations and strategic dialogues going onbetween the two countries. Former Indian foreign secretary Shivshankar Menon vis-ited Tehran during December 16–17, 2007, for the fifth round of the Indo-Iran strategic

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dialogue and foreign office consultations. Both countries have been holding securityconsultations through exchange of high-level visits and the established mechanisms ofinstitutionalised contacts between their respective National Security Councils. So farsix rounds of security consultations have been held. For the sixth round of securityconsultations, former Indian national security advisor M.K. Narayanan visited Tehranin July 2008.51 India’s foreign secretary, Nirupama Rao, visited Tehran in February2010 to discuss issues of terrorism emanating from Pakistan, which affects both Indiaand Iran.

Iran’s perceived quest for nuclear weapons

Iran’s quest for nuclear weapons has been one of the most contentious issues affectingIndia–Iran relations. Iran’s official position has been that it has no interest in developingnuclear weapons and its quest in the nuclear arena is for nuclear energy.52 However, adisconnect exists between their official position and the actual position on the ground.The exposure of a three-year-old personal letter written by the infamous Pakistaninuclear scientist, Dr A.Q. Khan, to his Dutch wife has reasserted this fact.53 As perthis letter, in the past, the Pakistani government had supplied nuclear knowhow to afew countries, including Iran.

As per the US National Intelligence estimate (made public during December 2007),Tehran had halted its nuclear weapons programme but it was ‘keeping open the optionto develop nuclear weapons’ and any decision to end a nuclear weapons programme is‘inherently reversible’.54 It is now suspected that Iran could have started looking at itsnuclear weapon intentions afresh.

As announced by President Obama at the G-20 summit held in September 2009,Iran has established a second high capacity uranium enrichment facility without theapproval of the IAEA. It has also been argued by experts that the sheer size of thisfacility and the type of structure being erected is itself an indication that Iran is lookingbeyond nuclear energy.

Currently, Iran has two uranium enrichment plants—one in the central city ofNatanz and a second, that has not yet begun enriching, near the city of Qom. Now,despite having its second site under dispute, it has been reported that PresidentAhmadinejad has approved a third site (location not known). All these sites are beingdeveloped in line with its nuclear energy roadmap. During November 2009, Iranannounced that it will be building 10 new uranium enrichment facilities. The con-struction on two of the 10 was to begin during the Iranian calendar year, which runsfrom March 2010 to March 2011.55

More importantly, on August 21, 2010, Iran said it had begun loading fuel into itsfirst nuclear power station. This facility at Bushehr took 35 years to build and would beoperated by Russia, which would be instrumental in supplying nuclear fuel and takingaway the nuclear waste. This involvement by Russia is being viewed positively by theUS and other European countries, and they feel there is no ‘proliferation risk’ from thisplant.56

It appears that resolving Iran’s nuclear predicament is going to be a difficult issue.The UN’s idea of outsourcing the job of enriching Iranian uranium to other statesremains under discussion, with no immediate solution in sight despite heavy lobbyingby a few states. This idea of using a ‘nuclear fuel deal’ as a likely way to reduce tensionsis not working. In such circumstances, the US is continuing with its policy of sanctions,which the Obama administration renewed for one more year in November 2009. Some

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of these sanctions have been in place since 1979 (imposed post-US embassy hostagecrisis in Tehran).57

The Obama administration has been lobbying hard with Russia and China—thetwo countries with veto power in the Security Council—towards bringing them closerto the US approach towards Iran. On the sidelines of the summit meeting on nuclearsecurity (April 12–13, 2010, in Washington), President Obama secured a promise fromChinese President Hu Jintao to join negotiations on a new package of sanctions againstIran. It is likely that Beijing may support the US efforts to pressure Iran.58 The US suc-cessfully persuaded the Security Council to adopt Resolution 1929 for imposing moresanctions on Iran in June 2010. On August 3, 2010, it imposed further sanctions on 21entities believed to be owned or controlled by the Iranian government and facilitatingillegitimate transactions.

On its part, Iran’s nuclear ambitions are not likely to be restricted to getting accessto nuclear technology alone. It could also be attempting to develop a missile pro-gramme. Iran made a successful entry into the global satellite club during February2009 with the launch of a self-developed satellite named Omid. This launch was under-taken from Iranian soil and using its own launcher. With this launch, Iran has demon-strated that they are in possession of dual-use technology, which has direct connotationsfor their ballistic missile programme. This launch also confirms that Iran has masteredthe technology required for separation of payload from missile in space and putting itin the right orbit. These skills are also important for an inter-continental ballistic mis-sile (ICBM) delivery. As of now, it is estimated that the ‘Iranians have shown a veryrudimentary capability in a technology that requires far greater sophistication’.59

There is a general assessment that Iran needs to do much more to reach the stateof making a usable nuclear device. Maybe because of this, the Obama administrationhas reviewed the proposal to scrap the Bush administration’s plans for deployment ofmissile interceptors in Poland and a radar system in the Czech Republic. This system,which has angered Russia, had been justified by the US as defence against a possibleIranian threat.

Ironically, the seeds of Iran’s nuclear programme lie in the assistance providedby the US in the mid-1950s. During the mid-1950s, the Eisenhower administrationdecided to increase its military, economic and civilian assistance to Iran, and thus camethe proposal to develop nuclear energy. By the 1970s, France and Germany also joinedthe US in providing assistance to Iran’s nuclear programme.60 However, post-Islamicrevolution (1979), Western nations started distancing themselves from Iran’s nuclearprogramme.

As of now, this nuclear issue has become a point of contention in Indo-Iran rela-tions. Indo-Iran ties in the 21st century suffer from severe limitations because ofimprovement in Indo-US relations. As an observer has pointed out, ‘ever since theUS and India started to transform their ties by changing the global nuclear order toaccommodate India, Iran has emerged as a litmus test that India has had to pass fromtime to time to the satisfaction of US policy makers’.61

For the last few years, India has consistently voted against Iran on the nuclear issuein the Security Council. Interestingly, India’s vote was never crucial from the point ofview of passing any resolution because the US had sufficient numbers on its side. So,in a way, it was only a loyalty test which India had to pass every time. However, nowwith the Indo-US nuclear deal seeing its successful culmination, India is in a positionto devise an independent policy on Iran. It is important for India to explain to the USthat the earlier ‘either-or policy’ may not be a good proposition, particularly when the

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Obama administration itself appears to be making some shift in their Iran policy. Indiahas given a positive signal towards engaging Iran by participating in the Tehran nuclearconference (April 2010). India is also critical of the sanctions. Speaking in Washingtonat the Woodrow Wilson Centre, foreign secretary Nirupama Rao said in April 2010, ‘Itcontinues to be our view that sanctions that target Iranian people and cause difficultiesto the ordinary man, women and child would not be conducive to a resolution of this(Iran) question’.62 India’s stand on Iran’s nuclear issue has been that while it backsIran’s peaceful use of nuclear energy, as a member of the Non-Proliferation Treaty(NPT), Tehran must observe its obligations under the treaty, and must take the viewsof the international community and the IAEA into consideration.

In its relations with New Delhi, Tehran’s approach has perhaps been ‘either you arewith us or with them (read the US)’. However, India has its own independent foreignpolicy. Unfortunately, Tehran reads many Indian actions incorrectly. In 2008, Tehranhad taken objections to India launching an Israeli satellite, TECSAR. Iran felt that thissatellite was meant to spy on its nuclear programme. But India looked at it as a purelycommercial venture.

India–Iran ties: what lies ahead?

Despite common concerns, there is a flip side to India–Iran relations which demandscritical attention. There are perceptions and misperceptions about issues which areimpacting India–Iran relations. These problems cannot be ignored and must be fac-tored into larger debates on India–Iran relations. The future of India–Iran relations willdepend on how both countries are able to balance and manage the problematic side oftheir relations. The nuclear issue has already been discussed.

Most Iranian officials and experts often refer to historical and civilisational linksbetween India and Iran as an important factor for cooperation. It has been pointedout that language and culture are important areas of cooperation. Greater interactionamong the scholars, students and experts has been emphasised. Iranian officials are ofthe view that the industrial sector, transportation, the steel industry and the oil sectorprovide a lot of room for India to cooperate with Iran. These are the sectors in whichIran is keen to cooperate with India.63

There is a perception in Iran that India and Iran have not realised the full potentialin bilateral relations. There is a need to overcome suspicion and have a common under-standing of the regional and international security environment. There is a need to takecurrent relations, which at best can be termed normal, to the strategic level. There isa general understanding within the Iranian establishment that India needs to spell outclearly its policy towards Iran. It is argued that India’s strategic cooperation with theUS is impacting its ties with Iran. These changing Iranian perceptions are likely toimpact future relations between the two countries.64

While analysing India’s perception, it can be argued that within India there is acommon consensus that Iran is an important regional player in West Asia and given itsgeo-strategic importance, India needs to engage Iran. However, views differ on how toengage Iran. Some are of the view that Iran has been neglected by India, which lacks anindependent policy towards Iran and there exists a huge ‘trust deficit’. It is often arguedthat Khatami’s visit in 2003 was the highest point in India’s diplomatic relations withIran. But today, there are many challenges faced by India in pursuing its policy towardsIran.65 Therefore, frequent dialogue with Iran will help bridge misunderstandingsbetween the two countries. Iranians do hint at Prime Minster Manmohan Singh’s visit

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to Oman and Qatar in November 2008 and later to Saudi Arabia in February 2010 andargue that Iran does not receive as high a priority in India’s foreign policy as it should.

On the contrary, there is a view in India that Iran has been insensitive to manyissues which are of great concern to India. It has never supported India’s casein the Organisation of Islamic Conference (OIC); rather it has supported Pakistanconsistently.66 In October 2009, the OIC appointed a special envoy on Jammu andKashmir, a move seen by observers in New Delhi as part of Pakistan’s efforts to interna-tionalise the issue.67 Another important issue, which needs to be factored in any largerdebate on India–Iran relations, is Iran’s response to the terrorist attacks on Mumbai onNovember 26, 2008. The US, Britain and India more or less held Pakistan responsi-ble for the attacks because of its inability to control terrorist groups operating out ofits soil. Iran, however, expressed a different opinion. On December 31, 2009, IranianForeign Minister Manuchehr Mottaki said that ‘certain extra-regional powers are car-rying out activities that cause instability in South Asia. They have organised plansthat lead to extremism’.68 The Iranian president also stated in December 2008 thatthe US may have been behind the attacks. Iran also offered to play a mediator’s role todefuse tensions between India and Pakistan.69 These statements are not helpful, if long-term cooperation is sought. Thus, there is a need for reciprocity. Moreover, for Indiathere are greater stakes in the Gulf. Given India’s energy interests and the presenceof migrant labour, the Arab countries of the Gulf are much more important to India.Therefore, India cannot ignore the importance of Arab countries while formulating itspolicy towards Iran.70 Besides, the ambiguity of the power hierarchy in Iran’s politicalstructure makes it difficult to engage with the nodal agency with which it could addressvarious issues and evolve mutually acceptable solutions to sensitive bilateral matters.

The aforesaid details of Indian and Iranian perceptions and misperceptions regard-ing the bilateral relations should help in formulating a new mechanism to take theexisting relations to a new level. Any policy which fails to recognise the problem areasis likely to be detrimental to the strategic interests of both countries. Measures whichcan be helpful in mending as well as enhancing India–Iran relations could be:71

• Diplomatic overtures by India—like hosting a dialogue of regional countriessuch as Iran, Pakistan, US, Afghanistan and Russia to address regional secu-rity issues. On Iran’s nuclear issue, India can downplay the issue and engage Iranin a much more constructive way.

• The private sector in India needs to be better informed about the government’spolicy towards Iran. Similarly, it is important for Iran to spell out its foreigninvestment policy for Indian companies.

• It is necessary to increase the number of staff in the Indian embassy with knowl-edge of regional languages and to create Indian information agencies in WestAsian countries. This will enable India to formulate its foreign policy based on aregular source of information and news.

• To bridge the communication gap, dialogue between thinktanks, universities andother agencies needs to be enhanced. Creating an India Chair in an Iranian uni-versity and an Iran Chair in an Indian university will go a long way in furtheringbilateral ties.

• Enhanced high-level visits will create a better environment for maintaining andenhancing the cooperation between the two countries.

• Both India and Iran will have to work towards a better understanding of thestrategic concerns of each other, both at the regional and global level.

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• Increased people-to-people contact will go a long way in cementing ties betweenIran and India.

For any meaningful bilateral cooperation, both India and Iran will have to go beyondrhetoric. To strengthen Indo-Iran cooperation, it is important that new ideas andmechanisms are introduced, emphasis is laid on regional and bilateral cooperation,and various agreements and MoUs are implemented. More importantly, one has toacknowledge that relations between the two countries, if they are to be lasting, willhave to be based on reciprocity and mutuality of interests. The future of India–Iran rela-tions under the second terms of President Ahmadinejad and Prime Minister ManmohanSingh will depend on how both countries are able to neutralise the problems which posechallenges for New Delhi and Tehran to take the current level of relationship forward.

Notes1. The Supreme Leader is Iran’s ultimate arbiter in religious and political matters under the

country’s constitution adopted after the 1979 revolution.2. What is important to note here is that while there was dissent against the election result, it was

limited in terms of class and section of population as well as areas. It was elitist in nature, ledby the middle class, students and women. The protests were confined mainly to select urbanareas, though there were exceptions like Tabriz, Mashad, etc. However, there was no evidenceof resistance in rural areas.

3. Charles Recknagel, ‘Suspensions of Two Factions Aim to Cripple Iran Reform Drive’, athttp://www.rferl.org/content/Irans_Suspension_of_Two_Factions_Aims_To_Cripple_Reform_Drive/2019483.html (accessed April 10, 2010).

4. One is the Mujahedin of Islamic Revolution, established in 1979. This faction backed MirHossein Musavi, the key opposition candidate in the June 2009 presidential election. The otherfaction is the Islamic Iran Participation Front, formed in 1991 after the landslide victory of thereformist President Mohammad Khatami.

5. Charles Recknagel, no. 3.6. The term ‘AfPak’ is now commonly used to denote Afghanistan and Pakistan ever since the US

formulated its Afpak policy in March 2009.7. ‘Iran’s Regional Role under the Neoconservatives: Challenges and Prospects’, in Anoushiravan

Ehteshami and Mahjoob Zweiri, Iran and the Rise of its Neoconservatives, IB Tauris, New York,2007, pp. 97–147.

8. Atul Aneja, ‘Iran Offers Olive Branch to Neighbours’, The Hindu, April 23, 2010, p. 14.9. P.R. Kumaraswamy, ‘Conflicting Dimensions of India’s Iran Policy’, Indian Foreign Affairs

Journal (Delhi), 3(1), January–March 2008, pp. 83–84.10. Abbas Maleki, ‘Iran’, in S. Frederick Starr (ed.), The New Silk Roads Transport and Trade in

Greater Central Asia, Central Asia-Caucasus Institute and Silk Road Studies Program, 2007,pp. 168–171; Atul Aneja, ‘Iran Consolidates Position in West Asia’, The Hindu, July 25, 2008,p. 12.

11. ‘Iraq’s Allawi Courts Iranian Support’, Khaleej Times, April 16, 2010, at http://www.khaleejtimes.com/DisplayArticle08.asp?xfile=data/middleeast/2010/April/middleeast_April231.xml&section=middleeast (accessed April 22, 2010).

12. Atul Aneja, ‘Iran to Set up Afghan Presence’, The Hindu, March 16, 2010, p. 13.13. Iran, with a population of approximately 71.5 million and 1.6 million sq. km of area, is located

in South-West Asia. It borders Afghanistan and Pakistan on its east, Iraq and Turkey to its west,Armenia, Ajerbaijan and Turkmenistan along the Caspian Sea to its north and the Persian Gulfand the Gulf of Oman to its south.

14. Meena Singh Roy, ‘Introduction’, in Meena Singh Roy (ed.), International and RegionalSecurity Dynamics, Institute for Defence Studies and Analyses, New Delhi, 2009, pp. 7–12;Fact Sheet provided by Ministry of External Affairs, Embassy of India in Tehran on November1, 2008; A.K. Pasha, ‘Emerging Challenges to India in the Gulf: Nature and Consequences’, inI.P. Khosla (ed.), India and Gulf , Konark Publishers, New Delhi, 2009, pp. 114–116.

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15. Text of the Tehran Declaration, signed by Prime Minister Shri Atal Bihari Vajpayee, andPresident of the Islamic Republic of Iran, Mr. Ayatullah Mohammed Khatami, in Tehran onApril 10, 2001, at http://meaindia.nic.in/ (accessed April 10, 2008).

16. Text of New Delhi Declaration and Road Map to Strategic Cooperation, signed by PrimeMinister of India and President of Islamic Republic of Iran, January 25, 2003, at http://meaindia.nic.in.

17. Ibid.18. Raj Chengappa, ‘Long Handshakes and Dosas, India-Iran Relations Back on Keel’, The

Tribune, May 19, 2010, at http://www.tribuneindia.com/2010/20100519/main3.htm.19. Bhadrakumar, ‘India Seeks Velvet Divorce from Iran’, Asia Times, November 5, 2008, at http://

www.asitimes.com/South_Asia/JK05Dfo1.html.20. ‘Iran’s Regional Role under the Neoconservatives’, no. 7.21. http://meaindia.nic.in/mystart.php?id=530216071 (accessed July 25, 2010).22. These trade figures do not include import of petroleum products and crude oil. See http://

dgft.delhi.nic.in (accessed July 3, 2009).23. Briefing by Indian foreign secretary Shivshankar Menon on visit of President Ahmadinejad of

Iran to India, April 29, 2008, at http://meaindia.nic.in/ (accessed April 20, 2008).24. Peter Baker, ‘Companies Feeling Pressure to Sever Ties with Iran’, The Hindu, April 26, 2010,

p. 9.25. International Energy Outlook, June 2006, Energy Information Administration, US Department

of Energy, at http://www.eia.doe.gov/oiaf/ieo/oil.html.26. Energy Information Administration /International Energy Outlook 2009, at http://www.eia.

doe.gov/oiaf/ieo/pdf/0484(2009).pdf (accessed May 19, 2010).27. Ibid., pp. 39–40.28. Fact Sheet on Iran, Indian Embassy in Tehran, November 2008, Ministry of External Affairs,

India.29. ‘Iran-India Trade up 80 pc in 2007-08’, Iran, October 31, 2008, at http://www2irna.ir/en/

news/view/menu-234/0810319227195419.htm (accessed June 30, 2009).30. ‘Regional Problems Unresolved Without India, Iran-Indian PM’, BBC Monitoring Global

Newsline-South Asia Political, March 29, 2009.31. Sandeep Dikshit, ‘Can’t Wait Indefinitely on Pipeline Project: Iran’, The Hindu (Delhi),

February10, 2010 at http://www.hindu.com/2010/02/10/stories/2010021060111100.htm(accessed April 10, 2010).

32. Under this agreement, Iran will provide Pakistan with 750 million cubic feet of gas per day forthe next 25 years. In Atul Aneja, ‘Iran, Pakistan Clinch Gas Pipeline Deal’, The Hindu, March18, 2010, p. 11.

33. ‘India Proposes Dialogue with Iran on IPI Pipeline’, The Hindu, March 31, 2010, athttp://timesofindia.indiatimes.com/india/india-seeks-fresh-talks-with-Iran-over-gaspipeline/articleshow/5829884.cms (accessed April 19, 2010).

34. ‘Krishna Heads to Tehran; Afghanistan, Pipeline on Agenda’, Hindustan Times, May 13, 2010,at http://www.hindustantimes.com/Krishna-heads-to-Tehran/Article1-543191.aspx (accessedJuly 12, 2010).

35. Energy Information Administration /International Energy Outlook 2009, no. 26, p. 39.36. ‘ONGC, Hindujas Spar over Stake in Iran Gas Field’, Business Standard, January 25, 2010,

at http://www.business-standard.com/india/news/ongc-hindujas-spar-over-stake-in-iran-gas-field/383581/ (accessed April 10, 2010).

37. ‘Iran Submits Feasibility Report on Iranian Block’, The Hindu, December 13, 2008, p. 16.38. Peter Baker, no. 24.39. Vladimir Radyuhin, ‘Russian Oil Major Pulls Out of Iran’, The Hindu, March 25, 2010, p. 16.40. Sujay Mehdudia and Siddharth Varadarajan, ‘Five Leading Indian Firms under US Scanner for

Iran Links’, The Hindu, March 24, 2010, p. 1.41. Ministry of External Affairs Reports (Government of India), 1995–96, pp. 32–33.42. Ibid., 1996–97, p. 32.43. National Report of I.R. Iran on the latest measures taken in line with promotion of

multimodal transport, Iran Ministry of Roads and Transportation, General Directorate ofInternational Affairs, November 2004; A. Spector, ‘The North-South Transport Corridor’,at http://www.brook.edu/printme.wbs?page=/pagedefs/e9e50344b3c7ff3b4670f6410a14146(accessed September 14, 2009).

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44. http://www.instc.org/Main.asp (accessed September 15, 2009).45. Briefing by Indian Foreign Secretary Shivshankar Menon, no. 23.46. Sandeep Dikshit, ‘India, Iran Discuss “regional solution” in Afghanistan’, The Hindu, August

7, 2010.47. Speech by Foreign Secretary at IDSA-IPIS Strategic Dialogue on India and Iran: An Enduring

Relationship, July 5, 2010, at http://meaindia.nic.in/mystart.php?id=530116039 (accessedJuly 18, 2010).

48. Atul Aneja, ‘India to Partner Iran on Russia Rail Link’, The Hindu, April 16, 2008.49. ‘Cooperation with US over Afghanistan to Depend on Obama Policies-Iran’, BBC Global

Newsline-Middle East Political, April 29, 2009.50. Sachin Parashar, ‘Afghanistan to Top India–Iran Talks’, The Times of India, March 7, 2010,

p. 20.51. Ministry of External Affairs Annual Reports, 2003–2007, Government of India.52. During the Tehran Conference (April 2010), Iran’s Supreme Leader has once again emphasised

this fact. See Thomas Erdbrink, ‘At Iran Nuclear Summit, Ahmadinejad Calls for US to DisarmFirst’, Washington Post, April 17, 2010.

53. Simon Henderson, ‘Investigation: Nuclear Scandal – Dr Abdul Qadeer Khan’, TheTimes, September 20, 2009, at http://www.timesonline.co.uk/tol/news/world/asia/article6839044.ece (accessed January 12, 2010).

54. Paul K. Kerr, ‘Iran’s Nuclear Program: Status’, CRS Report for Congress, November 20, 2008.55. The Wall Street Journal, April 19, 2010.56. ‘Iran’s Bushehr Plant not a Major Proliferation Risk: Experts’, August 20, 2010, at http://

www.nuclearpowerdaily.com/reports/Irans_Bushehr_plant_not_a_major_proliferation_risk_experts_999.html (accessed September 12, 2010).

57. http://en.rian.ru/world/20091113/156819147.html (accessed November 13, 2009).58. The New York Times, April 12, 2010.59. Julian Borger, ‘How World Leaders View Iran’s Space Ambitions’, The Guardian, February 3,

2009.60. Greg Bruno, ‘Iran’s Nuclear Program’, Council on Foreign Relations, at www.cfr.org61. Harsh V. Pant, ‘India-Iran Ties: The Myth of a “Strategic” Partnership’, November 2, 2008, at

http://casi.ssc.upenn.edu/node/130.62. Atul Aneja, ‘China’s Stance Boosts Iran’, The Hindu, March 26, 2010, at http://beta.

thehindu.com/opinion/lead/article306473.ece (accessed April 4, 2010).63. Views expressed by Iran’s Foreign Minister M. Mottaki during a seminar on Indo-Iranian

relations at the Institute of Political and International Studies, Tehran, November 2, 2008.64. Views expressed by Iranian officials in Foreign Ministry during author’s (Meena Singh Roy’s)

visit to Tehran in July 2009.65. ‘Engaging Iran: Opportunities and Challenges for India’, Report prepared by Meena Singh

Roy with inputs from Zakir Hussain and Mahtab Alam Rizvi, at http://www.idsa.in/event/EngagingIran.

66. Views expressed during Round Table on ‘Engaging Iran: Opportunities and Challenges forIndia’, Institute of Defence Studies and Analyses, August 6, 2009, at http://www.idsa.in/event/EngagingIran.

67. ‘OIC Appoints Special Envoy on Kashmir’, The Hindu, October 3, 2009, p. 1.68. ‘Iran Says Ready to Broker India–Pakistan Talks’, BBC Monitoring Global Newsline–Middle

East Political, January 1, 2009, at www.monitor.bbc.co.uk.69. ‘Iran Says Ready to Broker India–Pakistan Talks’, BBC Monitoring Global Newsline–Middle

East Political, January 1, 2009, at www.monitor.bbc.co.uk.70. P.R. Kumaraswamy, ‘India’s Iran Policy: Dispelling the Misconceptions’, at http://

opinionasia.com/article/print/679.71. Meena Singh Roy, ‘Indo-Iran’s New Strategic Milieu’, The Pioneer (Delhi), November 21,

2009.

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Appendix IIndia–Iran trade relations export-import data (Values in US$ million)

S.No Year 2004–05 2005–06 2006–07 2007–08 2008–09

1 EXPORT 1,231.39 1,188.35 1,446.48 1,943.92 2,534.012 %Growth −3.50 21.72 34.39 30.363 India’s Total Export 83,535.94 103,090.53 126,414.05 163,132.18 185,295.364 %Growth 23.41 22.62 29.05 13.595 %Share 1.47 1.15 1.14 1.19 1.376 IMPORT 410.21 702.46 7,618.55 10,943.61 12,376.777 %Growth 71.24 984.55 43.64 13.108 India’s Total Import 111,517.43 149,165.73 185,735.24 251,654.01 303,696.319 %Growth 33.76 24.52 35.49 20.68

10 %Share 0.37 0.47 4.10 4.35 4.0811 TOTAL TRADE 1,641.60 1,890.81 9,065.03 12,887.52 14,910.7812 %Growth 15.18 379.43 42.17 15.7013 India’s Total Trade 195,053.37 252,256.26 312,149.29 414,786.19 488,991.6714 %Growth 29.33 23.74 32.88 17.8915 %Share 0.84 0.75 2.90 3.11 3.0516 TRADE BALANCE 821.18 485.8917 India’s Trade Balance −27,981.49 −46,075.20 −59,321.19 −88,521.83 −118,400.95

Note: The country’s total imports (S.No.6) since 2000–2001 do not include import of petroleum products(27100093) and crude oil (27090000).Source: http://commerce.nic.in/eidb/iecnt.asp (Accessed April 22, 2010).

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