‘Gad­kari ef­fect’ on grow­ing Iran-In­dia re­la­tions

Tehran Times - - FRONT PAGE - By M K Bhadraku­mar

TEHRAN — If the ‘New­ton Ef­fect’ in physics has an equiv­a­lent in in­ter­na­tional diplo­macy, we can de­scribe what is hap­pen­ing to In­dia-Iran re­la­tions as the ‘Gad­kari Ef­fect’.

Like in the case of the 18th cen­tury English sci­en­tist Isaac New­ton’s op­ti­cal prop­erty of physics, the min­is­ter in the In­dian gov­ern­ment Nitin Gad­kari – ar­guably, by far the best per­form­ing col­league of Prime Min­is­ter Naren­dra Modi – has cre­ated a se­ries of con­cen­tric, al­ter­nat­ing rings cen­tered at the point of con­tact be­tween the In­dian and Ira­nian economies.

‘Gad­kari’s rings’ around the Chaba­har Port in the re­mote prov­ince of Sis­tan-Baluchis­tan in south­east­ern Iran are phe­nom­e­nally trans­form­ing the In­dia-Iran re­la­tion­ship.

The first de­fin­i­tive signs of this ap­peared in De­cem­ber when the quiet, in­tense dis­cus­sions be­tween New Delhi and Tehran un­der Gad­kari’s watch re­sulted in the agree­ment over a new pay­ment mech­a­nism that dis­penses with the use of Amer­i­can dol­lar in In­dia-Iran eco­nomic trans­ac­tions.

Prime fa­cie, it was a ri­poste to the use of sanc­tions (‘weaponiza­tion of dol­lar’) as a for­eign pol­icy tool to in­ter­fere in Iran’s oil trade with third coun­tries such as In­dia. (See my blog In­dia se­questers Iran ties from US preda­tory strike.)

How­ever, the 3-day visit to Delhi by the Ira­nian For­eign Min­is­ter Mo­ham­mad Javad Zarif on Jan­uary 7-9 high­lighted that the ap­pli­ca­tion of the pay­ment mech­a­nism to the In­dian-Ira­nian co­op­er­a­tion over Chaba­har Port holds seam­less po­ten­tial to en­er­gize the eco­nomic part­ner­ship be­tween the two coun­tries across the board. In a his­tor­i­cal sense, an op­por­tu­nity is at hand to make the part­ner­ship, which has been ‘oil-cen­tric’, a multi-vec­tor ‘win-win’ re­la­tion­ship.

The meet­ing be­tween Gad­kari and Zarif in Delhi on Tues­day sig­naled that the two sides have a ‘big pic­ture’ in mind. Thus, the open­ing of a branch of Bank Pasar­gad in Mum­bai is a timely step. Pasar­gad is a ma­jor Ira­nian pri­vate bank of­fer­ing re­tail, com­mer­cial and in­vest­ment bank­ing ser­vices, which pro­vides ser­vices such as let­ters of credit, trea­sury, cur­rency ex­change, cor­po­rate loans syndication, fi­nan­cial ad­vi­sory and elec­tronic bank­ing. (It is ranked 257th in the Banker mag­a­zine’s “1000 banks in the world”.)

Bank Pasar­gad is es­tab­lish­ing pres­ence in In­dia just when the Chaba­har Port has been ‘op­er­a­tional­ized’ and a first ship­ment from Brazil car­ry­ing 72458 tons of corn cargo berthed at the port ter­mi­nal on De­cem­ber 30.

More im­por­tantly, the dis­cus­sions be­tween Gad­kari and Zarif have cov­ered pro­pos­als for a barter sys­tem in In­dia-Iran trade. Iran needs steel, par­tic­u­larly rail steel and lo­co­mo­tive en­gines “in large quan­ti­ties, and they are ready to sup­ply urea,” Gad­kari told the me­dia.

Then, there is a pro­posal for a rail­way line con­nect­ing Chaba­har with Iran’s grid lead­ing north­ward to the bor­der with Afghanistan. Zarif summed up the broad sweep of dis­cus­sions this way:

“We had very good dis­cus­sions on both Chaba­har as well as other ar­eas of co­op­er­a­tion be­tween Iran and In­dia. The two coun­tries com­ple­ment each other and we can co­op­er­ate in whole range of ar­eas… We hope that in spite of the il­le­gal US sanc­tions, Iran and In­dia can co­op­er­ate fur­ther for the ben­e­fit of the peo­ple of the two coun­tries and for the re­gion.”

Para­dox­i­cally, the col­lab­o­ra­tion over Chaba­har Port, which has been a “byprod­uct” of In­dia-Pak­istan ten­sions, is rapidly out­grow­ing the zero-sum and gain­ing habi­ta­tion and a name in re­gional se­cu­rity. There are many ways of look­ing at why this is hap­pen­ing so.

Clearly, both In­dia and Iran have turned the Chaba­har project around to pro­vide an an­chor sheet for spurring trade and in­vest­ment be­tween the two coun­tries. This ap­proach holds big prom­ises. There is great com­ple­men­tar­ity be­tween the two economies.

Iran is the only coun­try in the Mid­dle East with a di­ver­si­fied econ­omy and a huge mar­ket with a fairly de­vel­oped in­dus­trial and tech­no­log­i­cal base and agri­cul­ture and richly en­dowed in min­eral re­sources. It is an oil rich coun­try and the needs of In­dian econ­omy for en­ergy, of course, are gal­lop­ing.

Sec­ond, Chaba­har Port can pro­vide a gate­way for In­dia not only to Afghanistan and Cen­tral Asia but also to Rus­sia and the European mar­ket. Log­i­cally, Chaba­har should be linked to the pro­posed North­South Trans­porta­tion Cor­ri­dor that would sig­nif­i­cantly cut down ship­ping time and costs for the trade be­tween In­dia and Rus­sia and Europe.

Thus, it falls in place that the Trump ad­min­is­tra­tion, which keeps an ea­gle’s eye on Iran’s ex­ter­nal re­la­tions, has given a pass to the In­dian in­vest­ment in Chaba­har. Prima fa­cie, Chaba­har Port can pro­vide ac­cess for Afghanistan to the world mar­ket and that coun­try’s sta­bi­liza­tion is an Amer­i­can ob­jec­tive. But then, Chaba­har can also pro­vide a po­ten­tial trans­porta­tion route in fu­ture for Amer­i­can com­pa­nies trad­ing and in­vest­ing in Afghanistan and Cen­tral Asia.

Ac­cord­ing to a Pen­tagon task force set up to study Afghanistan’s min­eral wealth, that coun­try is sit­ting on un­tapped rare min­er­als, in­clud­ing some highly strate­gic ones worth at least 1 tril­lion dol­lars. In­deed, Pres­i­dent Trump has point­edly spo­ken about it to ra­tio­nal­ize the US’ abid­ing busi­ness in­ter­ests in Afghanistan. Now, from indi­ca­tions of late, con­di­tions have dra­mat­i­cally im­proved for an Afghan set­tle­ment that pro­vides for en­dur­ing US pres­ence in that coun­try.

We must care­fully take note that Iran is in ef­fect sup­ple­ment­ing the ef­forts of Pak­istan and the US to kick­start an in­tra-Afghan di­a­logue in­volv­ing the rep­re­sen­ta­tives from Kabul and the Tal­iban.

Im­por­tantly, China has also adopted a sim­i­lar sup­port­ive role. A high de­gree of re­gional con­sen­sus is forg­ing that se­cu­rity and sta­bil­ity of Afghanistan should not be the stuff of geopo­lit­i­cal ri­val­ries.

The bot­tom line is that Iran’s own in­te­gra­tion into the in­ter­na­tional com­mu­nity, which the Trump ad­min­is­tra­tion is hin­der­ing, is in­evitable at some point sooner than we be­lieve.

The dis­clo­sure that be­hind the cloud cover of shrill rhetoric against Iran, Washington se­cretly made two over­tures to Tehran re­cently to open talks shows that Trump him­self is look­ing for a deal to get out of the cul-de-sac in which his Iran poli­cies have landed him.

Washington can­not but take note of the con­struc­tive role that Tehran is play­ing on the Afghan sit­u­a­tion. (In­ter­est­ingly, Zarif and Zal­may Khalilzad, US spe­cial rep­re­sen­ta­tive on Afghanistan who go back a long way, have paid over­lap­ping vis­its to Delhi.)

There is an in­flu­en­tial con­stituency of strate­gic an­a­lysts and opin­ion mak­ers within the US al­ready who rec­og­nize the geopo­lit­i­cal re­al­ity that Amer­i­can re­gional pol­icy in the Mid­dle East will for­ever re­main on roller coaster un­less and un­til Washington nor­mal­izes with Tehran. They ac­knowl­edge that at the end of the day, Iran is an au­then­tic re­gional power whose rise can­not be stopped.

From such a per­spec­tive, what Zarif’s dis­cus­sions in Delhi un­der­score is that while Iran is keep­ing its end of the bar­gain in the 2015 nu­clear deal, it is in­cre­men­tally de­feat­ing the US’ “con­tain­ment strat­egy” by its vari­ant of “ost­poli­tik”, fo­cused prin­ci­pally on three friendly coun­tries – Rus­sia, China and In­dia.

This is where much de­pends on the In­dian in­ge­nu­ity to cre­ate new webs of re­gional part­ner­ships. There are tan­ta­liz­ing pos­si­bil­i­ties. Re­mem­ber the 3-way MoscowBagh­dad-Delhi tri­lat­eral co­op­er­a­tion in the by­gone Soviet era?

That is only one model of how the three big coun­tries – Rus­sia, In­dia and Iran – can have com­mon in­ter­est to cre­ate sinews of co­op­er­a­tion at­tuned to Eurasian in­te­gra­tion. It is a rare con­ver­gence since there are no con­tra­dic­tions in the mu­tual in­ter­ests of the three re­gional pow­ers.

The writer has served as In­dian diplo­mat in for­mer Soviet Union, Pak­istan, Iran and Afghanistan, Turkey etc. He writes mainly on In­dian for­eign pol­icy and the af­fairs of the Mid­dle East, Eura­sia, Cen­tral Asia, South Asia and the Asia-Pa­cific.

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