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India-Iran keen to resume economic activities

India is rapidly switching gears with the view to improve its somewhat frayed relations with Iran, which has been one of the key suppliers of crude oil until 2018. Insiders said that the development of the crucial Chabahar port in the Indian Ocean will also gain centre-stage in the coming weeks as world order could be reset under President-elect of the US Joe Biden, who will take up the mantle from outgoing President Donald Trump next month.

In a significant move reflecting rapid geopolitical shifts, India, Iran and Uzbekistan are scheduled to hold their first meeting on the joint use of the strategic Chabahar port. As ministers dialogue, China will be the elephant in the room.

Earlier this year, China and Iran thrashed out a key $400 billion deal after which reports suggested that the latter had decided to drop India from the Chabahar rail project that connects Chabahar port and Zahedan.

“India was never out of the Chabahar port project though due to various reasons, the development of the same had slowed down,” an insider on condition of anonymity said.

While the proposed $400 billion investment will be spread over 25 years, it will allow China to access Iran’s oil and gas resources. The proposed Chinese investment involving economic and military co-operation with Iran underscores Beijing’s aim to expand its footprint in the Middle East. But analysts said that there is no blueprint yet on the proposed investment and details of the same are yet to be ascertained. The Iranians will also be conscious not to put all their eggs in the Chinese basket, especially amid signs that the US under Biden might revisit the Iranian nuclear deal which had broken Tehran's isolation by the Obama administration.

India has already developed the first phase of the Chabahar Port project, touted as New Delhi’s answer to Gwadar in Pakistan, developed by China as part of the China Pakistan Economic Corridor (CPEC). During the covid19 pandemic, India has also used the Chabahar Port to deliver relief materials to Afghanistan.

“Traditionally, India and Iran have had very close relations, the two countries also share common culture and heritage, we are hoping to revive the cordial ties,” energy expert Narendra Taneja told IndiaNarrative.com. Taneja also said India’s oil imports from Iran could resume too.

“Though China has announced large investments in Iran, it is yet to be seen how it will be rolled out. The blueprint is still not ready,” Taneja added.

Earlier in September, defence minister Rajnath Singh paid a short visit to Iran, on his way back from Moscow, where he attended the three-day meeting of the Shanghai Co-operation Organization. The news of Singh’s sudden visit to Iran was also extensively covered by the Iranian media, which also highlighted that the two countries enjoy commonalities and friendly ties.

“It was a gesture aimed at passing an important message to Iran that India remained a friends and valued it as an important ally,” an analyst said.

“In a meeting between India’s Minister of Defense Rajnath Singh and Ambassador Ali Chegini of Iran, the two referred to the bright historical relations and friendship between the two once-neighboring countries and discussed the methods to enhance military ties,” Iran’s Islamic Republic News Agency (IRNA) said..