Big in Iran: PM Modi’s critical counterbalance in West Asia

The enduring symbolic authority of the Red Fort, from where Indian prime ministers speak to the nation on Independence Day – continuing the Mughal tradition - has an Iranian connection.

 

Until the Great Mutiny 158 years ago, Persian was the official language of the Delhi Durbar.

PM Modi’s visit to the Islamic Republic of Iran adds another layer to the ancient ties between the Indian and the Persian civilizations.

 

Equally, the visit is a crucial counterbalancing outreach between states in today’s terms. For almost unnoticed, under PM Modi, India’s relations with the Sunni Kingdom of Saudi Arabia and the UAE have become stronger than perhaps at any time since Independence.

 

The Indian PM was accorded Saudi Arabia's highest civilian honour - the King Abdul-Aziz Sash. Both countries have jointly worked on intelligence sharing and deportation of terror operatives.

 

In this context, the trip is a message from India to Iran in that the Shia country counts very high on Indian diplomatic priorities. The global conflict between the Sunni and the Shia has placed countries like India, with a sizable population of both, in a sticky situation.

 

With this visit, India will enhance contact with the more moderate face of Islam and rekindle India’s Persian connection.

 

Beyond symbolism: This is business

 

Apart from the general Persian nostalgia, three very businesslike items will dominate the PM’s trip to Iran.

 

They are oil, gas and a strategic port.

 

Iran is a key partner for India. It is India’ second largest oil supplier – and potentially could emerge as the largest one. India imports up to 400,000 barrels of crude oil every day from the Islamic republic. India has already worked out payment of over a billion dollars of oil dues during the sanctions on Iran.

 

In a far-sighted move - India will give Iran an interest of 75 basis points over the LIBOR for oil dues.

 

The remaining payment of about $6 billion hinges on clarity about the US sanctions. This has spooked international banks dealing with Iran. It is critical given that the money will be delivered in Euros.

 

Modi will likely reassure Tehran that the monies will be sorted out through Washington and paid via Italian banks acting as the via media.

 

Read more by the author: Costlier US F16s for Pak, good news for India

 

The second initiative is regarding the strategically-located and poetically-named Chabahar port. It faces the Indian Sea board and will allow India to export to Afghanistan without a Pakistan involvement.

 

Dodging Pakistan and directly accessing at least four Afghan cities through an Indian-built road in that country is of critical importance for both trade and defence. More important, it allows Iran to handle great trade volumes through India. The Indian Navy has preceded PM Modi at Bandar Abbas as a critical show of strength.

 

However, the $250 million initial Indian investment will need the PM’s personal push. In Afghanistan and elsewhere India has often won concessions only to falter on the delivery of actually building the infrastructure.

  

Lastly, Modi needs to play hardball on one of India’s great gas finds - the Farzad-B (photo above) gas field. This was invested into and developed by the Indian firm ONGC Videsh. This deal is on the line. At 2.5 trillion cubic feet of recoverable reserves, every day counts. A fracture of this reserve falls in Saudi territory.

 

With gas drillers are keepers. The Saudis are drilling as you read this.

 

At the highest level, summits are meant for breakthroughs. PM Modi will do well to look closely at history, but also focus on prospects, with this welcome and vitally important visit to Tehran.

 

Ninad D Sheth is a senior Delhi-based journalist. The views expressed in this article are his own.

 

Image courtesy for the Farzad-B gas field: http://www.millenniumpost.in/