EXECUTIVE SUMMARY: On May 5 of this year, India and Iran announced the renewal of their partnership at Chabahar Port in southeastern Iran. The strategic port is India’s gateway to Central Asia and Northern Europe. Its great importance stems from the fact that it allows India to bypass Pakistan’s ports and challenge the Chinese “Pearls” program, which seeks to seize central ports in the global system. After more than 20 years of negotiations that had their ups and downs due to the international sanctions on Iran, the countries signed an agreement for the development and operation of the port for 10 years. The announcement of the revival of the partnership gives us an opportunity to examine the complexity of the relationship between the two countries and the implications of this partnership for Israel and the global system.

India and Iran: Two-way opportunism

Until 2019, bilateral relations between India and Iran revolved around India’s energy dependence on Iran and the Iranian perception of India as a source of investment and a path to circumvent Western sanctions. However, relations between the countries have been clouded by China, especially in view of the significant rapprochement between Iran and China in recent years. As India sees China as its primary geopolitical threat and challenge, this poses a dilemma. India considers an economic presence in Central Asia a major national interest, which complicates its relationship with an increasingly China-friendly Iran. The Iranians, meanwhile, view the complex situation as an opportunity to maximize profits from both China and India. In parallel with the Indian rapprochement with Iran, India has remained steadfast in its good relations with Israel – relations that are in fact getting tighter.

Thus it seems that under Prime Minister Narendra Modi, India is managing to balance its foreign relations – relations that may appear at first glance to be contradictory and cross-cutting. This approach is explained by the fact that India manages its diverse foreign relations from a purely egocentric point of view, meaning it is not overly concerned with the interests of other countries. There is a sense in India that it is now important enough in the global system that it can afford to ignore the web of relations of other countries and conduct itself independently. Because of this, India is not heavily weighting the possible effect of an India-Iran rapprochement on Indian-Israeli political and security relations among its considerations.

Indo-Iranian relations can be briefly described as two-way opportunism. Relations between the countries began in the 1950s, shortly after India’s independence, and were based on the tradition of warm relations between the Persian and Hindu peoples. However, relations between countries also saw periods of depression – especially after the Islamic Revolution in Iran, when Iran expressed support for Pakistan and called for the independence of Kashmir, a disputed region between India and Pakistan. Over the years, particularly since the beginning of the millennium, relations between the countries gradually improved while they cooperated in dealing with the Taliban in Afghanistan.

The rise in economic relations between India and Iran contributed to the improvement of relations.  Iran was the second-largest supplier of oil to India after Russia until 2019, and their joint membership in international economic forums like the SCO and the Shanghai Trade Organization, as well as BRICS, the opposition organization to the West, helped strengthen relations further. However, their economic relations have always faced the challenge of the sanctions imposed by the West on Iran. The willingness of the two countries to complete the Chabahar Port Agreement is thus a landmark in the development of their relations, as its importance has implications beyond the economic.

Chabahar Port and Indian geopolitics

The agreement raises the bilateral relations between the countries to a new level and introduces a dimension of strategic partnership. Chabahar Port, which Iran aims to expand and develop, is in fact two separate ports – Shahid Kalantari and Shahid Behashti, each of which has five berths. Plans for the development of the port began back in 1973 during the Shah period and were delayed due to the Islamic Revolution in Iran. In 2003, India and Iran renewed talks on a joint plan to develop the port, but these talks were impeded by the sanctions on Iran and the negotiations faltered. In May 2016, the countries signed an agreement according to which India will renovate one of the berths in the Shahid Bahshti port and build a 600-meter container handling facility there.

India derives many economic benefits from the Chabahar Port Agreement. The upgrading of the port will give it international access to a North-South route that will save time and transport costs between India and Eurasia. Estimates are that the Chabahar Port will bring about a 60% reduction in shipping costs and will halve shipping time from India to Central Asia. In addition, the port will enable India’s trade with Russia to be 30% faster and cheaper than the traditional Suez Canal route, which is expected to increase trade between India and Russia.

Due to India’s great dependence on energy imports, its presence in the port will strengthen its energy security, as the port will open up the potential to bring in energy from new sources. So far, India has relied on Russia as a major supplier of crude oil, along with oil imports from the Gulf countries. India is careful to comply with the sanctions at present, due to its relations with the United States, but the energy potential is clear. Iran is a potential source of cheap energy and is closer to India than any other source, and Chabahar Port offers huge potential for energy trade between the two. Furthermore, it gives India direct access to oil and gas imports, independent of the security-unstable Straits of Hormuz.

The development of Chabahar Port is expected to pave the way for future energy projects like a submarine pipeline between Iran and India, which would allow the import of natural gas from Iran and Central Asia directly to India. To India, the agreement is less about strengthening its relations with Iran and more about expanding its economic and commercial opportunities in Central Asia and allowing a faster and cheaper flow of energy.

The value of Chabahar Port for India exceeds its economic potential, however. It lies in its potential to link India to Central Asia, Europe and Russia, and to serve as another lever for strengthening India’s geopolitical influence. The port will allow India a shorter alternative trade route with Afghanistan and from there to the rest of Central Asia, thereby strengthening India’s influence and geopolitical standing in Central Asia. Furthermore, India will be able to bypass Pakistan and establish a more formidable presence next to that country. For example, a transit at the Chabahar Port will allow India direct access to the air force base it maintains in Tajikistan.

India in the port of Chabahar and the consequences for Israel

The signing of the agreement between India and Iran did not escape the notice of the United States, which responded with a statement from the State Department that emphasized that the agreement does not release India from its responsibility to enforce the sanctions on Iran. This statement does not appear to have made the Indians reconsider the agreement. In response, Indian Foreign Minister Jaishankar said, “I think it’s a question of communicating, convincing and getting people to understand that this is actually for everyone’s benefit. I don’t think people should take a narrow view of it.”

This laconic Indian response reflects India’s unique position in today’s global system and its ability to balance and curb pressures deriving from growing competition between the powers. With his words, the Indian Foreign Minister expressed the current Indian perception of India as a country that can disobey even powers as great as the United States due to its importance in the inter-power struggle between the United States and China.

The signing of the agreement between Iran and India passed under the radar of the Israeli government, which is busy with the regional war and its own internal affairs. In normal times, such an agreement would have been a red alert in the security and political system in Israel. With that said, despite the natural concerns, the Chabahar Port Agreement should not be seen as representing a fundamental change in Israel-India relations. It has not altered India’s traditional position of managing its relations with Iran as if there is no Israel and its relations with Israel as if there is no Iran.

Accordingly, those who believe that India’s growing involvement with Iran might affect its willingness to be a balancing mechanism between Israel and Iran are in for a disappointment. India has traditionally avoided intervening in international conflicts that do not serve its national interests. Experience suggests that this is the case now as well. As far as India’s rapprochement with Iran in the Chabahar Port context is concerned, the agreement should be seen for what it is: two-way opportunism that does not threaten India’s warm relations with Israel.