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OP-ED: How Modi’s miscalculations have cost India

  • Published at 03:10 pm July 28th, 2020
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Photo: Reuters

With the fast-changing political tectonics in the region, India may have lost more than it has gained

Minor events taking place on the roof of India’s peninsula recently have hurt the country’s image. 

What happened in Ladakh, is one of the most discussed developments -- something that has been a reported game-changing deal between Iran and China and dubbed the Sino-Iranian Comprehensive Strategic Partnership. The deal, if it is confirmed, will help Iran in gaining an overall infrastructure rehaul thanks to Chinese investments to the tune of $400 billion, while Beijing will have guaranteed fuel supply from the oil-producing nation for the coming quarter century.

We can gauge the impact of the proposal from the proposed amount of investments and the likelihood of it eventually becoming a part of China’s Belt and Road Initiative (BRI). The opening sentence of the document on the deal, as reported in the New York Times, states: “Two ancient Asian cultures, two partners in the sectors of trade, economy, politics, culture, and security with a similar outlook and many mutual bilateral and multilateral interests will consider one another strategic partners.”

One of the most obvious takeaways from the deal is that it will help Iran boost its domestic infrastructure and economy which has been severely struggling due to economic sanctions imposed by the US. It provides Iran with an alternative boost of investment which will help it overcome the problems because of the sanctions. 

It will also help Beijing in gaining a space for its infrastructure industry. With the onset of the Covid-19 pandemic, the Chinese economy has seen a slowdown and this deal can help it in gaining a new market. Iran itself has been reeling under the effects of Covid-19 and would look forward to an economic impetus.

The global response to BRI has changed in the seven years since its launch. Chinese investments have proved to be not-so-benign, and a number of countries have had a relook at what such a form of commitment may mean. In a number of countries, BRI has also become a major political issue.

I am very certain that Iran must have followed up on these developments. But it needs these investments to overcome the challenges of the trade embargo but also to add new cards to its strategic game. By participating in this deal, Iran would also push Europe, and particularly Germany, the maker of Joint Comprehensive Plan of Action (JCPOA) or the Iran nuclear deal, back to the discussion table. Small powers always thrive if they have more options to choose from. Iran would also hope that Chinese banks would be able to bypass sanctions because of their deep engagement with the US economy.

And for the rising power China, the plans of developing the Jask port in Iran would be a significant achievement. Jask would possibly play the role in the Persian Gulf that the Djibouti base is supposed to play on the Gulf of Aden. The two ports may also operate as a support system for one another. Without doubt, Jask will also play a role for monitoring and technical espionage for the PLA Navy.

Moreover, this would further allow China to achieve a better balance between Saudi Arabia and Iran. China has hosted the Saudi king as well as the crown prince in the last four years. 

China has used its economic clout over the last several years to achieve Saudi silence about the human rights violations against Muslim minority Uighurs in Xinjiang. It would hope that Iran does the same amongst the Shia-majority countries.

And by any means, would this be the first or a major Chinese investment in Iran? Chinese President Xi Jinping had visited Iran in 2016 in the post-JCPOA era. And deals worth $35 billion had been in existence since then. China has been a buyer of Iranian oil and has invested in infrastructure projects in Iran for over a decade. However, it all went south after Trump announced US withdrawal from the JCPOA and implemented fresh sanctions in 2018.

The ongoing US-China trade war coupled with the Covid-19 outbreak and the election year rhetoric in the US has pushed the relationship to its limits. China is also aware that actions such as Britain’s changed posture on Huawei, is not without a possible American role. It appears as if China has also given up its search for global status in the post Covid-19-era and the days of China’s peaceful rise are truly over.

China’s conduct in the South China Sea, on the Indian border and with countries like Australia shows that it is undertaking unilateral actions to showcase its capacity and intent and elsewhere its behaviour vis-à-vis Taiwan, Japan, Malaysia, and Vietnam show that it is gearing up for a hard fight. The Iran deal is part of the same strategy to become a pro-active player.

As a consequence, detailed discussions, particularly on the developments about the Chabahar-Zahedan rail links, have focussed on its implications for India. 

Quite a few commentators have concluded that India has lost the project to China. That is the brutal reality. However, that may not really be the case. The Chabahar-Zahedan link would eventually extend to Zaranj in Afghanistan. The Chabahar-Zaranj project is a key link for India’s land based connectivity with Afghanistan.

India’s infrastructure projects in Afghanistan have been developed on the assumption of activating the rapid connectivity for landlocked Afghanistan via the Chabahar project.

Rising India has been investing in the initiative for close to 15 years now and more actively in the last decade after its numerous initiatives for India-Pakistan-Afghanistan received cold treatment from Islamabad/Rawalpindi. Keeping this channel open would be even more crucial as the recent Badakhshan attack was reportedly the first Taliban, IS, al-Qaeda joint offensive. Such a possibility had always remained on the horizon, even at the risk of complicating the Afghan security environment, even further and beyond repair.

Needless to point out, this route is also significant for the International North South Transport Corridor with Iran at the heart of the connectivity network. Prima Davie, this project -- an outcome of the Ashkabad Agreement had brought East Europe and Central Asia closer to the Indian Ocean. And this can be a significant element for India’s connectivity aspirations and once again Chabahar holds the key.

Lastly, the news of Chinese role in Iranian projects would have been received a lot differently in the Indian media had Galwan not happened. Right now, India-China relations are at their lowest point in many years and the developments of June 15-16 have reset the many assumptions about India-China relations. This is reflecting in the way this news about Iran has been interpreted in Indian writings.

India and China have previously held bilateral consultations on Afghanistan. India, and China as large energy import dependent countries will also play a crucial and possibly cooperative role for stability in the Gulf and in West Asia in the years to come. 

Seen from this context, this has opened up many more possibilities, and the development may appear less challenging, perhaps, in the longer run. However, with the fast-changing political tectonics in the region, India may lose much more that what it had gained.

Nazarul Islam is an educator based in Chicago.

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