Indian expert: lifting of sanctions on Iran will have mixed impacts on India

In an exclusive interview with IRNA here, an Associate Fellow, Nuclear and Arms Control Centre, Institute for Defence Studies & Analyses (IDSA) Dr. Reshmi Kazi said, “Lifting of the sanctions on Iran will impact India both positively and negatively. On the positive side, the immediate impact is that there will be a considerable rise in India’s crude oil imports from Iran. India will be able to freely resume importing crude oil with dollars which was not possible when sanctions were placed on Iran by the global powers.”

“With the restrictions remaining effective, India was left with no option but to pay Iran in Indian rupees, with the money being deposited in an Indian bank account. This was bearing on India as the shipping charges involved in importing goods from and exporting goods to Iran was very expensive. With lifting of the sanctions, Indian companies hope that trade would be much easier now. For Iran, this would also prove beneficial as it would free up its unpaid oil revenues amounting to billions of dollars.” She added.

On the impact of the lifting of sanction on Iran on the bilateral trade between Iran and India, Dr. Kazi said, “lifting of the sanctions will also permit Tehran to purchase agricultural commodities such as barley, rice and soybeans from markets other than India. The Indian exporters of these goods to Iran had charged Iran premiums well over the global prices while sanctions were in place. With the cheaper alternatives now available elsewhere for Iran, the Indian exporters of these commodities will see a reduction in business with the Iranian customers.”

Rejecting the idea that India’s policy on certain countries may influence New Delhi’s policy toward Tehran, the seasoned analyst of the global issues said, “India follows a foreign policy that is essentially independent and it is not allied to any military alliance
or power bloc. Both India and Iran have always shared political, economic, social and cultural links that are deep rooted. These connections have enriched our civilizations over the years.”

“Deep civilizational links between India and Iran have forged economic interests which have been mutually beneficial to both the countries. In the strategic terms, the continued bilateral relations are important for India as it would consolidate its position in Central Asia which is crucial for India’s energy security. Besides, the large Shia population is India constitutes an important connection between India and Iran.”

Terming the implementation of the Iran-Pakistan-India (IPI) gas pipeline project as very important for whole the region, Dr. Kazi said, “India has been energetically pursuing the Iran–Pakistan–India (IPI) gas pipeline project. Once operational, it is expected to benefit India, Iran and Pakistan. This is definitely a concrete step towards regional diplomacy. It is important to note that India continued its ties with Iran even during the sanction period.”

On New Delhi’s plans to intensify its engagement with Tehran after lifting of the sanctions on Iran, Dr. Kazi said, “India has already welcomed an Iranian delegation in August 2015 and invited investments in infrastructure projects including railways, ports, bridges and rail electrification. This was seen as the beginning for an increased bilateral cooperation. Further, India has liberalized its visa policy for Iran in three categories - employment, conference, students and research visa. This is a big step indicating India’s inclination to reach out to the Persian Gulf nation.”

“India believes in reciprocating to the Iranian gestures as part of its policy to reinvigorate bilateral ties with Iran. The road transport, highways and shipping minister Nitin Gadkari visited Iran in May 2015 to sign a MoU on expansion of the Chabahar port project,” She added.

On India delaying its investment in the Chabahar Port, she said, “India is wary of the strategic implications involved in the development of the Chabahar Port. It has undertaken several steady measures towards this extent as it opens sea-land access to
Afghanistan bypassing Pakistan and North-South Transportation Corridor. This also opens up the sources of hydro carbons for India.

Hence India, in cooperation with Iran, is trying its level best to resolve the irritants and conclude contract for the expansion of the strategically located Chabahar Port at the earliest possible.

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