Why India is trying to expand trade with Iran

The creation of Pakistan cut India off from longstanding trade routes to Central Asia and beyond. India sees Iran as a way to reconnect, despite US sanctions. 

|
Amit Dave/Reuters/File
A laborer unloads sacks of sugar from a truck at a wholesale food market in the western Indian city of Ahmedabad in this August 2010 file photo.

As the United States isolates Iran by pushing countries to cut oil purchases and other commerce with the Islamic republic, India is building new trade ties there, saying Iran is its path to building the influence it needs in Central Asia and Afghanistan.

Prior to partition, the Indian subcontinent enjoyed trade and political links with Central Asia and onward into Russia and Europe. The creation of Pakistan cut India's access to the region and India has long eyed Iran as a workaround. 

India's government is hosting a 14-nation conference this week to help build a new shipping network, the International North-South Corridor, that will use Iranian ports, highways, and railroads. The project aims to connect India to parts of Europe in half the time required by current trade routes through Egypt's Suez Canal

The shipping conference comes three weeks after an Indian government-backed trade delegation returned from Iran, announcing new possibilities for trade. And last week, Indian export groups said Iran had made new purchases of animal feed and was looking for wheat, sugar, and tea – all as the US is pushing India to cut back its Iranian ties.

India's outreach to Iran poses a dilemma to the US. While Washington has been a champion of India's rise as a regional power and welcomed its aid effort in Afghanistan, Iran's nuclear program remains an overriding foreign policy concern. Secretary of State Hillary Clinton told Congress in February during congressional testimony that the US was holding “very intense and very blunt” conversations with India and other countries, such as China and Turkey, to stop oil imports from Iran.

But Indian officials have remained defiant. Given India’s geopolitical position with Iran, economic and security interests in Afghanistan, and tumultuous trading relations with nuclear-armed Pakistan, India sees Iran as a critical long-term partner.

“The United States is only looking at short-term advantages,” says Gen. Dipankar Banerjee, a senior fellow at the Institute of Peace and Conflict Studies. “We understand the US interest to get Iran to give up nuclear weapons, but we have to look at India’s strategic interests in having security and trade in the region beyond 2014 when US forces withdraw from Afghanistan.”

With an estimated $3 trillion in untapped minerals in Afghanistan, a stable trade route through the country would provide needed resources for India’s economic development. Banerjee believes it could also help stabilize the Afghan economy and act as a buffer against radicalization.

Beyond trade, India has signed on to train Afghan security forces in India and pumped in $2 billion in development assistance since the fall of the Taliban. India recently used the port of Chabahar in southeastern Iran for the first time – after helping build the port a decade ago – to transport 100,000 metric tons of wheat to Afghanistan as part of its humanitarian aid to the war-torn country.

However, Afghanistan's economic development and stabilization rests on far more than India's involvement and the difficulties created by US sanctions on Iran. 

“The sanctions towards Iran are a complicating factor in the economic strategy towards Afghanistan. But, they are not by any stretch of the imagination the only complicating factor,” says Ellen Laipson, President and CEO of the Stimson Center, a Washington-based public policy institute.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Why India is trying to expand trade with Iran
Read this article in
https://www.csmonitor.com/World/Asia-South-Central/2012/0329/Why-India-is-trying-to-expand-trade-with-Iran
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe