Tag Archives | West Asia geopolitics

India’s West Asia policy — is it losing out to China?

India needs to inject fresh thinking into its West Asia policy to further its national interest and avoid being left out due to China’s foray

The Chinese president Xi Jinping’s recent visit from January 17-23 to Saudi Arabia, Iran and Egypt signal Beijing’s intentions to play a proactive role in this region. China’s ravenous appetite for energy notwithstanding, it has been very astute in dealing with the countries in West Asia. The visit was all the more significant because tensions had arisen between Iran and Saudi Arabia due to execution of a Shiite cleric, Sheikh Nimr al-Nimr by Saudi Arabia in early January 2016. This led to break in diplomatic relations between Saudi Arabia and Iran. Unfazed, China went ahead with the visit.

What is of interest is how once a staunch anti-communist nation like Saudi Arabia warmed up to China’s overtures.  Saudi Arabia established diplomatic ties with China in 1990.  This was preceded by China offering CSS-2 intermediate range ballistic missiles to the Saudis. In 2007, China sold Dong Feng(DF) 21 medium range ballistic missiles with the tacit approval of the US Central Intelligence Agency(CIA). Saudi Arabia is the largest supplier of crude to China. According to the International Monetary Fund(IMF), trade between the two countries increased from US $1.28 billion in 1990 to US $ 74 billion in 2012.   China’s demand for oil is expected to grow from 6 million barrels per day to 13 million barrels per day by 2035. In order to diversify its sources, China has naturally looked towards Iran.

China played an important role in lifting the UN sanctions against Iran. It was a key negotiator with US and other permanent members of the UN to persuade Iran in capping its nuclear program.  So it was not a surprise that Xi Jinpeng was the first world leader to visit Tehran after sanctions were lifted on January 17, 2016. China and Iran have agreed to enhance security cooperation through intelligence sharing, counter-terror measures, military exchanges and coordination.  Iran is a crucial link in the strategically ambitious China’s ‘One Belt One Road'(OBOR) project. According to a Chinese government report, OBOR aims to connect China with Central Asia, Russia and Europe (Baltic).  It will connect China with the Persian Gulf and Mediterranean Sea. With the US practically vacating the Middle East, China seeks to step in to fill the vaccuum.

As the US seeks to pivot to Asia-Pacific through Japan, allies in South East Asia and India, it is natural for China to enhance the contours of its relationships with countries in West Asia. China is in for the long haul. On the other hand, India has been trying to play catch up. It did not balance the relationships between the West and Iran during the economic sanctions. Suitably placed for negotiations role, it ceded space to China. With Chabahar project also getting delayed due to slow progress on India’s part, it shouldn’t surprise us if we lose it. Least of all to China.

 

Guru Aiyar is a research scholar with Takshashila Institution and tweets @guruaiyar

Featured Image: Khezr beach, Hormuz(Iran), licensed from creativecommons.org

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Why is India hesitant in its policy towards Iran?

 The slow progress on Iran policy can have long term strategic implications for India

With sweeping changes occurring in West Asia after the lifting of sanctions against Iran by the US on 16th January, Iran is all set to play a major role in the geopolitics of this region. But India’s Iran policy seems to stuck in stasis. In May 2015, the long standing Chabahar port deal was finalised with Iran. The port is slated to be operational by the end of 2016. This will link India with Afghanistan and Central Asia. Calling off the sanctions is a welcome opportunity to be seized.  All indications towards the end of 2015 pointed towards this development and India should have been ready. It seems the government did not think that sanctions would be lifted so soon.

In a speech delivered at the India International Centre, Delhi on 18th January, Mr Gholamreza Ansari, Iran’s ambassador to India said, “In the changed circumstances in West Asian region, India cannot follow a policy of patient waiting any more. I have often been advised to be patient on big India-Iran projects. Does India want to wait for centuries before capturing the right opportunities?” Iran had asked India to conclude the bilateral agreement quickly at the Joint Commission Meeting(JCM) on 28th December 2015.  The main hitch was amendment to ‘withholding tax’ with which India exempted crude payments to Iran, if it was done in Rupees. There was a sense of urgency for this to be done before lifting of the sanctions. With sanctions gone, the need no longer exists as payments will have to be done in dollars. During the sanctions regime, Iran could not trade in dollars. It is free to do so now. There are no barriers to trade. The Indian products like Basmati rice, soyameal, sugar, and pharmaceuticals will have to compete with other countries.

Lack of coordination between ministries is also affecting the important Chabahar project. Iran wanted a loan for developing the rail network from port. In spite of the ministry of external affairs stressing the urgency, the department of financial services and ministry of railways did not move with the desired speed for reasons unknown. As per the deal in May 2015, the contract was supposed to be signed by November last year. If the government does not have the money, could it not invite the private sector? If sufficient guarantees of security is given, then private players will be willing to get involved. After all, there are other projects in Iraq and Syria worth thousands of crores that would interest them. The government only needs to give a push to get this going. After all, Modi is known for his clinical efficiency to get things done.

 

Guru Aiyar is a Research Scholar at Takshashila Institution and tweets @guruaiyar

Featured image: Holy shrine of Abdulazim in Tehran by David Stanley, licensed by creativecommons.org

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