India-Iran-Uzbekistan Pursue Central Asian Connectivity - The Diplomat, 18 December 2020

In my column for The Diplomat this week, I looked at India-Iran-Uzbekistan plans for Central Asian connectivity.  The region has its fair share of great power politics, but the Iranian port of Chabahar has the potential to shift some of the regional dynamics in India's favor.   

India, Iran, and Uzbekistan have held their first trilateral meeting for possible joint use of Chabahar port. The meeting was chaired jointly by India’s Secretary of Shipping Sanjeev Ranjan, Uzbekistan’s Deputy Minister of Transport Davron Dehkanov, and Iran’s Deputy Transport Minister Shahram Adamnejad. Using Chabahar port for trade and transit purposes as well as strengthened regional connectivity were the key agenda items at the meeting. India’s keenness to explore this option comes from its desire to extend connectivity into Eurasia. Double landlocked Uzbekistan has also been interested in using the port for transit facilities into the Indian Ocean and as a means to expand its trade and transit options. That Uzbekistan has already developed rail connectivity into Afghanistan as a means to link with Iranian railway lines reflects Tashkent’s seriousness. Other Central Asian states like Kazakhstan have also been interested in exploring such options.  

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Given the geostrategic location of Central Asia, the region is also witnessing a fair share of great power competition. While the region is viewed as Russia’s immediate backyard and Moscow has traditionally maintained a dominant role in relations with Central Asia, China has steadily strengthened its footprint. India has also been pursuing both geopolitical and economic ties with the region. 

Chabahar has the potential to shift some of the regional dynamics in India’s favor. First, it could prove to be a gateway to Central Asia and Eurasia, which can, most importantly, avoid Pakistan. A year ago, the Trump administration exempted India from sanctions for the development of the port because of the benefits it potentially had for both India and Afghanistan. A Trump administration official said, “We have provided a narrow exemption for the development of Chabahar that allows for the construction of the port and rail line that allows for the export of refined oil products to Afghanistan.” 

This week’s trilateral meeting is reported to be an outcome of last week’s India-Uzbekistan bilateral summit between India’s Prime Minister Narendra Modi and Uzbekistan’s President Shavkat Mirziyoyev. This is clearly an effort at exploring an alternate option for Central Asia to China’s Belt and Road Initiative (BRI). India has long historic connections to Central Asia, but its relations with the region waned for a number of reasons, most importantly the partition of the Indian subcontinent and the creation of Pakistan, which blocked Indian access to the region. Since coming to office, Modi has made fresh efforts to re-establish linkages with the region, calling Central Asia a part of the country’s extended neighborhood. 

But lack of physical connectivity has proven to be a major hurdle in building trade and economic ties. Modi became the first Indian leader to travel to all five Central Asian republics – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan – in 2015. In addition to energy security cooperation, India and Central Asia have both shunned Islamic terrorism and extremist ideology. Fighting cross-border terrorism has become an important common issue shaping their agenda. India has also been stepping up defense cooperation with the region, with a defense attaché posted in each of the Indian missions in Central Asia. Among the Central Asian republics, Uzbekistan has emerged as one of the more proactive players in its engagement with India. The two countries signed a civil nuclear agreement in January 2019, under which Uzbekistan agreed to supply India with uranium.  

Regional connectivity and infrastructure projects have also been high on Uzbekistan’s agenda. Seeing Chabahar port as a connectivity solution for Uzbekistan is not new either. In fact, in June 2018, following an earlier meeting between Modi and Mirziyoyev on the sidelines of the Shanghai Cooperation Organization (SCO) summit, then-Indian Foreign Secretary Vijay Gokhale said the two leaders were keen to use Chabahar port as an additional connectivity route.  

Not surprisingly, at last week’s bilateral summit meeting between India and Uzbekistan, infrastructure and connectivity projects figured prominently. The two countries signed nine agreements including on counterterrorism and infrastructure-related issues. Both Modi and Mirziyoyev agreed to pursue connectivity projects via the International North-South Transport Corridor (INSTC). INSTC is a multi-modal infrastructure initiative spanning around 7,200 km. It encompasses a network of ship, rail and road routes for transporting freight between India, Iran, Afghanistan, Central Asia, Azerbaijan, and Europe, with the goal of creating transport linkages among major cities including Astrakhan, Baku, Bandar Abbas, Moscow, and Mumbai. Feasibility studies undertaken so far has shown significant reduction of transportation costs, to the tune of $2,500 per 15 tons of cargo. India is “pitching for” Uzbek participation in the INSTC connectivity project.  

India’s push with the trilateral arrangement for Uzbekistan to use Chabahar port is important in the context of expanding bilateral, trilateral, as well as broader regional cooperation. But more significantly, it is a geopolitical move aimed at countering growing Chinese influence in the region. India has capacity issues in this regard compared to China, but New Delhi is planning on cashing in on existing projects to expand its reach and linkages so that the Central Asian republics have an alternative to China’s BRI.  

India’s Growing Iran Dilemma - The Diplomat, 25 April 2019

In this week's column for The Diplomat, I write on India's growing Iran dilemma, and the current sanction waiver issue is just the latest manifestation of New Delhi's rising challenge in managing ties with Tehran.

The Trump administration appears to have decided not to extend waivers from sanctions on those countries that continue to buy oil from Iran. The decision not to extend another round of Significant Reduction Exceptions (SREs) will have a significant impact on big Asian oil importers including India, China, Japan, and South Korea, which had each initially secured a 180-day exemption from U.S. sanctions last year.

Among these countries, India is likely to be significantly impacted. India is the second largest importer of Iranian crude oil after China, and New Delhi is reported to be buying a considerable share of its oil from Tehran, making Iran the third largest oil supplier to India after Iraq and Saudi Arabia. This means that the Indian government will find it difficult to accept the U.S. decision.

The issue also raises broader questions about New Delhi’s relations with Washington. Among those is whether India has miscalculated its capacity to manage the United States. Given the centrality of India in the U.S. Free and Open Indo-Pacific strategy, the Modi government may have assumed that India will get another exemption from the sanctions that are to kickstart on May 1.

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Indian Petroleum Minister Dharmendra Pradhan tweeted to say that India has “a robust plan for an adequate supply of crude oil to Indian refineries. There will be additional supplies from other major oil-producing countries; Indian refineries are fully prepared to meet the national demand for petrol, diesel & other petroleum products.” But while India may have possibly been ready for additional reduction of oil imports from Iran, New Delhi is certainly not ready for a complete halt.

The U.S. decision is likely to create some negative reaction in New Delhi and raise once again the rhetoric of the United States as an unreliable partner that encroaches on Indian interests and sovereignty. Such a dynamic has been seen in the past as well whenever there have been tensions between the United States and India.

But in truth, India does have alternate options – Saudi Arabia, the UAE, and even the United States are potential suppliers that could replace Iran as an oil source. In fact, a White House statement made just this point: “The United States, Saudi Arabia, and the United Arab Emirates, three of the world’s great energy producers, along with our friends and allies, are committed to ensuring that global oil markets remain adequately supplied. We have agreed to take timely action to assure that global demand is met as all Iranian oil is removed from the market.”

Nonetheless, there are a number of strategic reasons why India wants to continue buying Iranian oil in spite of other options available. For instance, Shia Iran is seen in New Delhi as an ally against the predominantly Sunni Pakistan. Pakistan’s traditionally close relations with Saudi Arabia made Iran a possible ally. Iran’s position on Pakistan’s flank is also attractive, as is the perception of common Indian-Iranian interest in countering Pakistan’s influence in Afghanistan.

From a wider perspective, New Delhi also sees Iran as a conduit to Central Asia, a region that India considers strategically vital. India has invested in Chabahar port in Iran and highways that provide an alternative route to both Afghanistan and Central Asia, bypassing Pakistan. And despite the growing closeness with the United States, there is residual sympathy in New Delhi for some of Washington’s opponents, including Iran, that is rooted in India’s historic cultivation of multiple alignments with a diverse array of states. Finally, there is a question of timing too: In the midst of a tough national election campaign, the Modi government will not want to be seen as bowing to U.S. diktats.

But the impact of the U.S. decision on India can also belie India’s own challenges in its relationship with Iran, which are important to keep in mind as well. For one, India has invested more in its relationship with Saudi Arabia and other anti-Iranian Gulf monarchies. Such improving relationships will put pressure on India to moderate its support for Iran.

India has also grown increasingly close to Israel, a country that is the source of vital military equipment for India, but which is also engaged in severe competition with Iran. New Delhi has so far managed to insulate these relationships, but they also mean that India cannot be seen to be going out of its way to support Tehran.

Iran’s positioning on a number of issues that matter to India is no longer very reassuring to New Delhi. For instance, Iran appears to be more closely aligned to Pakistan on Afghanistan than before, as evidenced by Pakistan Prime Minister Imran Khan’s recent trip to Iran.

Last and certainly not least, all said and done, the United States itself is an increasingly vital partner for India. Joining Beijing in defying American wishes on the Iran issue may not be particularly wise given the broader interests that Washington and New Delhi and share. All of this ensures that New Delhi will find itself in a strategically difficult position in the coming weeks.