Featured Iran Boots Out India From Huge Gas Field Development
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Surenas
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China wins, India loses in Trump’s gamble on crushing Iran
India has found itself on the losing end of the Trump administration’s gamble in Asia and its “maximum pressure” policy toward Iran. In some ways, the damage may be irreversible, as China is expanding its presence in Iran and moving quickly to fill gaps created by U.S. sanctions.
Iran’s Chabahar port along the Oman Sea, originally intended to be developed by India, was supposed to be “an engine of growth” for both countries. Four years after signing the bilateral agreement, India’s difficulty in balancing its relations with Iran and the United States, as well as Tehran’s growing coziness with Beijing, has endangered the deal. Can Delhi still regain its once-promising “golden gateway to Afghanistan and the Central Asian region”?
Two Indian ministers visited Iran recently. Defense Minister Rajnath Singh visited in September and held a “fruitful meeting” with his Iranian counterparts, wherein they discussed “regional security issues including Afghanistan and the issues of bilateral cooperation,” according to his own account. It was the first visit by an Indian Defense Minister in almost twenty years. Days later, Indian Foreign Minister S. Jaishankar visited Tehran briefly and “discussed strengthening bilateral cooperation and reviewed regional developments.”
Both visits begged the question of whether the impacts of Washington’s “maximum pressure” campaign against Iran may be jeopardizing India’s long-term strategic interests, particularly vis-à-vis China.
While “maximum pressure” has been successful in bringing the Iranian economy to its knees, raising dissatisfaction among the Iranian population, increasing the regime’s paranoia, and most importantly, generating an all-time high level of tension in the Persian Gulf region, it clearly has not achieved its main goal of changing “Tehran’s behavior.”
It has, however, succeeded in forcing some of Iran’s most important partners, notably India, to reduce their economic ties. Bilateral trade between India and Iran plunged from $17 billion in 2018-2019 to $3.5 billion in 2019-2020, mainly because Iran’s oil exports to India have been reduced to zero.
The United States can help India replace Iranian oil. But it cannot offer India Iran’s unique geographical location: a connection between the Indian Ocean, the Middle East, Persian Gulf, Central Asia, and Europe. For a number of years, India tried to balance its relations with Iran — an important element of China’s growing influence in the region — and the United States. Delhi’s fear was that bowing to Washington risked losing Iran to China. It appears that that fear was not unfounded.
Iran and China
Significantly, shortly after the October 8 announcement of the newly imposed U.S. sanctions on Iran’s financial sector, Iranian Foreign Minister Javad Zarif visited China for “close consultations.” Both countries “share views on important spheres such as the fight against the U.S. unilateralism and interference in the internal affairs of countries,” according to Iran’s Ministry of Foreign Affairs at the time.
After the Trump administration withdrew from the Joint Comprehensive Plan of Action, or JCPOA, in 2018, Iran had hoped that the European Union would aggressively promote bilateral trade and investment to mitigate the effects of U.S. sanctions. While it did launch a special trade mechanism called Instex, European companies, fearful of U.S. retaliation, have so far almost entirely failed to use the facility.
As a result, China has emerged as Iran’s most important economic lifeline. In early July, Iranian Foreign Minister Javad Zarif announced to parliament that Iran and China are negotiating a 25-year prospective deal covering trade, infrastructure, and energy worth an estimated $400 billion.
While promising from Iran’s point of view, it remains unclear whether and to what extent China, whose investments in some countries have proved problematic, will follow through. Moreover, to maintain a balance in its relationships with other countries in the region, including those that are hostile to Tehran, such as the UAE and Saudi Arabia, Beijing may feel obliged to expand its economic ties with them.
Iran and India
But China’s ties with Iran may, in addition to their economic advantages, also offer long-term geostrategic advantages, particularly vis-à-vis India’s own regional ambitions.
In 2019, when Supreme Leader Ali Khamenei blessed a $300-million investment by Iran’s National Development Fund to construct a railroad line that would connect Zahedan, in the southeastern part of Iran, to Chabahar, Iran’s only Indian Ocean port, Tehran insisted it had no intention of excluding India from the Chabahar project.
The planned railroad, which Iran originally hoped that India would develop, has strategic importance in Khamenei’s view, and as a key part of a long-standing plan to connect land-locked Central Asian countries, notably Afghanistan, to the Gulf of Oman at Chabahar and to develop the Makran coast in Iran’s relatively poor Balochistan region. Iranian officials also viewed Makran as an alternative route for importing goods, effectively bypassing the Strait of Hormuz. The Omani port of Sohar is only 55 kilometers from Chabahar and could thus potentially replace Iran’s heavy reliance on the UAE’s Dubai.
Developing Chabahar would also serve India well, as it would provide it with a secure and direct gateway to Central Asia through Afghanistan. Currently, India’s transit trade to Central Asia runs through Pakistan and has frequently been subject to contention because of the long-troubled India-Pakistan relationship. Indeed, Chabahar is also 700 kilometers closer to Afghanistan than Pakistan’s Karachi port.
Last December, the Trump administration approved a narrow sanctions exemption for Chabahar due to its importance to Afghanistan’s economy, although the exemption has proved relatively ineffective as Washington’s more general sanctions regime has meant that payments have been delayed or even cancelled.
Frustrated by India’s delays in developing Chabahar, Iranian officials proposed in June 2019 to Pakistan and ultimately to China a project connecting the Iranian port with Pakistan’s Gwadar port, only about 70 kilometers away. “Both ports are not competitive and can complement each other,” Zarif stated earlier during his trip to Islamabad in May 2019. Chabahar could help connect Gwadar to Central Asia, Russia, and Turkey. Whether the proposal was a ploy to pressure India is unclear, but it was noteworthy that, by that time, China had already established a foothold in Chabahar, while Gwadar has been already extensively developed by Beijing.
Located on the Arabian Sea, Gwadar links northwest China with the Indian Ocean via the 3,000-kilometer China-Pakistan Economic Corridor, or CPEC. CPEC is part of China’s Belt and Road Initiative, a massive, continent-spanning infrastructure and trade project covering both maritime and land routes.
While India needs Iran to gain secure access to Afghanistan and other landlocked countries in Central Asia, China already has extensive land links with the region, and it remains unclear whether Chabahar will be included in the $400 billion trade and investment agreement. But, if so, Beijing not only would gain yet another asset on the Arabian Sea coast as suggested by Zarif, but also a possible way to deny India the same opportunity.
responsiblestatecraft.org
India has found itself on the losing end of the Trump administration’s gamble in Asia and its “maximum pressure” policy toward Iran. In some ways, the damage may be irreversible, as China is expanding its presence in Iran and moving quickly to fill gaps created by U.S. sanctions.
Iran’s Chabahar port along the Oman Sea, originally intended to be developed by India, was supposed to be “an engine of growth” for both countries. Four years after signing the bilateral agreement, India’s difficulty in balancing its relations with Iran and the United States, as well as Tehran’s growing coziness with Beijing, has endangered the deal. Can Delhi still regain its once-promising “golden gateway to Afghanistan and the Central Asian region”?
Two Indian ministers visited Iran recently. Defense Minister Rajnath Singh visited in September and held a “fruitful meeting” with his Iranian counterparts, wherein they discussed “regional security issues including Afghanistan and the issues of bilateral cooperation,” according to his own account. It was the first visit by an Indian Defense Minister in almost twenty years. Days later, Indian Foreign Minister S. Jaishankar visited Tehran briefly and “discussed strengthening bilateral cooperation and reviewed regional developments.”
Both visits begged the question of whether the impacts of Washington’s “maximum pressure” campaign against Iran may be jeopardizing India’s long-term strategic interests, particularly vis-à-vis China.
While “maximum pressure” has been successful in bringing the Iranian economy to its knees, raising dissatisfaction among the Iranian population, increasing the regime’s paranoia, and most importantly, generating an all-time high level of tension in the Persian Gulf region, it clearly has not achieved its main goal of changing “Tehran’s behavior.”
It has, however, succeeded in forcing some of Iran’s most important partners, notably India, to reduce their economic ties. Bilateral trade between India and Iran plunged from $17 billion in 2018-2019 to $3.5 billion in 2019-2020, mainly because Iran’s oil exports to India have been reduced to zero.
The United States can help India replace Iranian oil. But it cannot offer India Iran’s unique geographical location: a connection between the Indian Ocean, the Middle East, Persian Gulf, Central Asia, and Europe. For a number of years, India tried to balance its relations with Iran — an important element of China’s growing influence in the region — and the United States. Delhi’s fear was that bowing to Washington risked losing Iran to China. It appears that that fear was not unfounded.
Iran and China
Significantly, shortly after the October 8 announcement of the newly imposed U.S. sanctions on Iran’s financial sector, Iranian Foreign Minister Javad Zarif visited China for “close consultations.” Both countries “share views on important spheres such as the fight against the U.S. unilateralism and interference in the internal affairs of countries,” according to Iran’s Ministry of Foreign Affairs at the time.
After the Trump administration withdrew from the Joint Comprehensive Plan of Action, or JCPOA, in 2018, Iran had hoped that the European Union would aggressively promote bilateral trade and investment to mitigate the effects of U.S. sanctions. While it did launch a special trade mechanism called Instex, European companies, fearful of U.S. retaliation, have so far almost entirely failed to use the facility.
As a result, China has emerged as Iran’s most important economic lifeline. In early July, Iranian Foreign Minister Javad Zarif announced to parliament that Iran and China are negotiating a 25-year prospective deal covering trade, infrastructure, and energy worth an estimated $400 billion.
While promising from Iran’s point of view, it remains unclear whether and to what extent China, whose investments in some countries have proved problematic, will follow through. Moreover, to maintain a balance in its relationships with other countries in the region, including those that are hostile to Tehran, such as the UAE and Saudi Arabia, Beijing may feel obliged to expand its economic ties with them.
Iran and India
But China’s ties with Iran may, in addition to their economic advantages, also offer long-term geostrategic advantages, particularly vis-à-vis India’s own regional ambitions.
In 2019, when Supreme Leader Ali Khamenei blessed a $300-million investment by Iran’s National Development Fund to construct a railroad line that would connect Zahedan, in the southeastern part of Iran, to Chabahar, Iran’s only Indian Ocean port, Tehran insisted it had no intention of excluding India from the Chabahar project.
The planned railroad, which Iran originally hoped that India would develop, has strategic importance in Khamenei’s view, and as a key part of a long-standing plan to connect land-locked Central Asian countries, notably Afghanistan, to the Gulf of Oman at Chabahar and to develop the Makran coast in Iran’s relatively poor Balochistan region. Iranian officials also viewed Makran as an alternative route for importing goods, effectively bypassing the Strait of Hormuz. The Omani port of Sohar is only 55 kilometers from Chabahar and could thus potentially replace Iran’s heavy reliance on the UAE’s Dubai.
Developing Chabahar would also serve India well, as it would provide it with a secure and direct gateway to Central Asia through Afghanistan. Currently, India’s transit trade to Central Asia runs through Pakistan and has frequently been subject to contention because of the long-troubled India-Pakistan relationship. Indeed, Chabahar is also 700 kilometers closer to Afghanistan than Pakistan’s Karachi port.
Last December, the Trump administration approved a narrow sanctions exemption for Chabahar due to its importance to Afghanistan’s economy, although the exemption has proved relatively ineffective as Washington’s more general sanctions regime has meant that payments have been delayed or even cancelled.
Frustrated by India’s delays in developing Chabahar, Iranian officials proposed in June 2019 to Pakistan and ultimately to China a project connecting the Iranian port with Pakistan’s Gwadar port, only about 70 kilometers away. “Both ports are not competitive and can complement each other,” Zarif stated earlier during his trip to Islamabad in May 2019. Chabahar could help connect Gwadar to Central Asia, Russia, and Turkey. Whether the proposal was a ploy to pressure India is unclear, but it was noteworthy that, by that time, China had already established a foothold in Chabahar, while Gwadar has been already extensively developed by Beijing.
Located on the Arabian Sea, Gwadar links northwest China with the Indian Ocean via the 3,000-kilometer China-Pakistan Economic Corridor, or CPEC. CPEC is part of China’s Belt and Road Initiative, a massive, continent-spanning infrastructure and trade project covering both maritime and land routes.
While India needs Iran to gain secure access to Afghanistan and other landlocked countries in Central Asia, China already has extensive land links with the region, and it remains unclear whether Chabahar will be included in the $400 billion trade and investment agreement. But, if so, Beijing not only would gain yet another asset on the Arabian Sea coast as suggested by Zarif, but also a possible way to deny India the same opportunity.
China wins, India loses in Trump’s gamble on crushing Iran
“Maximum pressure” may have permanently pushed Iran toward China. How much leverage India may retain in Iran remains to be seen.
responsiblestatecraft.org
Indus Pakistan
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I am surprised that we are seeing tectonic events take place on our western borders but little coverage is being given by Pakistani media and or discussed on PDF. Thanks for tagging me. The two events are -
- Afghanistan. Taliban are now well on their way to gaining some share in the power structure of Kabul. This means reduced Indian influence. Notice reduced. I don't think we can go back to pre 2001 but still compared to what has been the status quo for last 18 years this is fantastic news for Pakistan and a disaster for India. Pakistan's policy of secretly supporting Taliban has been vindicated. The changes taking place now in Pakistan offer immense scope for Pakistan with help of China to squeeze India out. We saw Gulbudin Hikmatyar's recent visit to Pakistan underling the change.
- Iran. Until recently Indian's on this very forum used to taunt us and sing songs about Chah Bahar and some of our sectarian zombies would claim Iran would give Chah to Indian Navy. I always argued that India's sucking of US and Israeli testicles was conficting with Indian embrace of Iran and at sometime push would come to shove when India would have to make a hard choice. USA or Iran. I also told the Indians and Iranians India would drop Iran. The Indian's would reply with "we are not Pakistan". We don't get pushed etc.
Well, well. Thanks to Trump [we badly need Trump to win again as he is the best thing that could happen for Pakistan] Iran was hot hard and India effectively had to make a choice when New Delhi was told "stop buying Iranian oil". I would love to ask all those bragging Indians today how much oil does India buy from Iran this year? India has stopped buying Iranian oil and looks to Arab suppliers now etc.
Even better China has moved into Iran and signed a $400 billion deal. Thus Pakistan's ally is gaining ground in Iran. All this again offers Pakistan working with China immense opportunities in Iran.
From my perspective I have always said we made a choice in 1947. We did not want to be part of a Indian order. If we turned our back to the east in 1947 the natural choice is look west and north. With north [China] we have done well. Now we need to sorrt out our relationships ith neighbours to the west which offers untold opportunities. CPEC can be enlarged into a larger Af-Pak Iran China Corridor to later spread into Central Asia and link up with Turkey.
I always said this would happen. If there are members from few years ago they will know my thoughts on this subject.
Have I had interaction with you before?
Mighty Lion
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Victory for India as Iran could not find a single foreign country to develop Farzad-B despite lying for months that many countries want to participate in the gas field project. Now Iran is forced to use only domestic companies for the project.
Every country refused to develop Farzad-B due to US sanctions. No Global banks were ready to provide loans either.
Every country refused to develop Farzad-B due to US sanctions. No Global banks were ready to provide loans either.
Mighty Lion
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Victory for India as Iran could not find a single foreign country to develop Farzad-B despite lying for months that many countries want to participate in the gas field project. Now Iran is forced to use only domestic companies for the project.
Every country refused to develop Farzad-B due to US sanctions. No Global banks were ready to provide loans either.
Every country refused to develop Farzad-B due to US sanctions. No Global banks were ready to provide loans either.
Indus Pakistan
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Let's not kid ourselves. United States of America along with it's NATO partners and allies like Japan can bring enormous pressure to bear and no country is immune to this. However some countries are less pliable to US pressure. China is the least pliable [note I said least] therefore for Iran is the best choice. It has been a catastrophic blunder by Tehran to not give China sufficient hand but piss around with India which is just a American/Israeli puppet. Albeit a fcukin large puppet.
Also by converging with China it would help Iran to find a medium with Pakistan as that country has huge influence on Pakistan and it's shadow would offset the sectarian animus inside Pakistan.
Mighty Lion
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Chabahar port is progressing well because merciful US has given sanctions waiver for the port.
Except Chabahar Port not a single foreign investment project in Iran has been able to move forward after Trump came to power in 2017. Even Russia and China could not make any meaningful investments in Iran after Trump came to power (other than signing MOUs which have no value without a final deal).
Indus Pakistan
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Don't worry. It was progressing in 2010, In 2015. 2020. And will be in year 2999. Keep it up.
Mighty Lion
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Oh BTW @Indus Pakistan why is Pak-Iran trade so laughably low (particularly Pak exports to Iran)?
Pakistan exported just $0.01 million goods to Iran in July to May 2020 thanks to US sanctions as per Pak govt itself:
@Philosopher Pakistaj commerce minsiter admitted Pakistan cannot do anything about Pak iran trade due to US sanctions.
Pakistan exported just $0.01 million goods to Iran in July to May 2020 thanks to US sanctions as per Pak govt itself:
@Philosopher Pakistaj commerce minsiter admitted Pakistan cannot do anything about Pak iran trade due to US sanctions.
Philosopher
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Like you, I am also surprised with the little coverage these issues, especially the Iran-China deal are getting. This Iran-China deal will naturally involve Pakistan too, I don't see any major separation here. This trilateral Iran-Pakistan-China linking will be a major source of growth and instability going forward.
We spoke couple of time, but briefly. I had seen your posts in the past and mirror your sentiment and view regarding Iran-Pakistan and China.
Mighty Lion
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Indeed it is progressing very well now:
Govt extends 40% discount on cargo movement between India, Chabahar Port in Iran
The levy of concessional vessel related charges (VRC) will be applied proportionately, subject to vessel loading at least 50 twenty-foot equivalent units (TEUs) or 5000 MT cargo to ShahidBeheshti Port
www.livemint.com
Indus Pakistan
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US pressure and Pakistan's terrible record on exports generally. That is why Pakistan's economy has been ameamic. It's not like we export $100s of bilions to rest of the world.
Have you changed your name?
Surenas
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You are deluded if you think that this is a victory for India. There is a reason why, according to media reports, India is still trying to change Tehran's mind.
Iran gave India more leniency and credit in this project because India discovered the gas field. But Indian subservience to American policy has shattered Iran's patience.
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No, the same. If I recall, we last commented on a thread relating to Iran's deal with China, but it was literally just one comment.
Indus Pakistan
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Fifth largest population. Second largest population growth rate. Possibly end up being a two billion plus country by end of century. So there.
Make babies. Make babies. And brag the 1,000,000,000,000,000,000,000,000 population.
