SUMMARY

In general, the relationships of Iran and Oman with India,

Indonesia and Bangladesh are mostly well. The countries see
each other as important partners in trade. Save for the case of
India-Iran relations, there appears to be no barriers in
international trade among these countries. The difficulty in the
advancement and improvement in India-Iran relations appears
to be due to the sanctions imposed on Iran by the UN and the
US following its refusal to suspend its uranium enrichment
program. Perhaps, even if India now has cordial relations with
Iran, it still does not want to compromise its relations with the
US.

INDIA-IRAN RELATIONS
During much of the Cold War period, relations between the Republic of India
and the erstwhile Imperial State of Iran suffered due to different political
interestsnon-aligned India fostered strong military links with the Soviet
Union while Iran enjoyed close ties with the United States. Iran's continued
support for Pakistan and India's close relations with Iraq during the IranIraq
War impeded further development of IndoIranian ties.

Iran was sanctioned by the United Nations, the United States, India, Israel
and other countries because of its uranium enrichment program. However,
despite these sanctions, at present, Iran is the second largest supplier of
crude oil to India, supplying more than 425,000 barrels of oil per day, and
consequently India is one of the largest foreign investors in Iran's oil and gas
industry.

Sanctions against Iran

Following the Iranian Revolution of 1979, the United States imposed
economic sanctions against Iran and expanded them in 1995 to include firms
dealing with the Iranian government. In 2006, the UN Security Council
passed Resolution 1696 and imposed sanctions after Iran refused to suspend
its uranium enrichment program. U.S. sanctions initially targeted
investments in oil, gas, and petrochemicals, exports of refined petroleum
products, and business dealings with the Iranian Revolutionary Guard Corps.

Over the years, sanctions have taken a serious toll on Iran's economy and
people. Since 1979, the United States has led international efforts to use
sanctions to influence Iran's policies, including Iran's uranium enrichment
program, which Western governments fear is intended for developing the
capability to produce nuclear weapons. Iran counters that its nuclear
program is for civilian purposes, including generating electricity and medical
purposes.

Sanctions were first imposed when Iran rejected the Security Council's
demand that Iran suspend all enrichment-related and reprocessing activities.
Sanctions will be lifted when Iran meets those demands and fulfills the
requirements of the IAEA Board of Governors.

Even other countries imposed sanctions on Iran. One of the non-UN

mandated sanctions against Iran is that of Indias ban on the export of all
items, materials, equipment, goods, and technology that could contribute to
Iran's nuclear program. India has not approved the necessary insurance for
Iranian ships hit by U.S. sanctions, effectively barring them from entering
Indian waters. In 2012, the country said it was against expanding its
sanctions. Ironically, however, India imports 12 percent of its oil from
Iran and cannot do without it.

Currently, India and Iran have friendly relations in many areas. There are
significant trade ties, particularly in crude oil imports into India and diesel
exports to Iran. In August 2013, while carrying oil in the Persian Gulf, Iran
detained Indias largest ocean liner Shipping Corporation (SCI)s vessel MT
Desh Shanti carrying crude from Iraq. But, Iran stood firm in its stand that
the detention of the oil tanker was purely a technical and non-political
issue. On May 22, 2016, Prime Minister Narendra Modi paid an official visit
to Iran. The visit focused on bilateral connectivity and infrastructure, an
energy partnership, and trade.

Oil and Gas

In 2010, US officials warned New Delhi that Indian companies using the Asian
Clearing Union (ACU) for financial transactions with Iran run the risk of
violating a recent US law that bans international firms from doing business
with Iranian banks and Tehran's oil and gas sector, and that Indian
companies dealing with Iran in this manner may be barred from the US. The
United States criticizes the ACU of being insufficiently transparent in its
financial dealings with Iran and suspects that much of their assets are
funneled to blacklisted repressive organizations in Iran such as the Army of
the Guardians of the Islamic Revolution.

On 27 November 2010, the Indian government, through the Reserve Bank of

India, instructed the country's lenders to stop processing current-account
transactions with Iran using the Asian Clearing Union, and that further deals
should be settled without ACU involvement. RBI also declared that they will
not facilitate payments for Iranian crude imports as global pressure on
Tehran grows over its nuclear program. This move by the Indian government
will make clear to Indian companies that working through the ACU "doesn't
necessarily mean an Iranian counterpart has an international seal of
approval".

India objected to further American sanctions on Iran in 2010. An Indian

foreign policy strategist, Rajiv Sikri, dismissed the idea that a nuclear armed
Iran was a threat to India, and said that India would continue to invest in Iran
and do business. Despite increased pressure by the US and Europe, and a
significant reduction in oil imports from Persian oil fields in 2012, leading
political figures in India have clearly stated that they are not willing to stop
trade relations altogether. To the contrary, they aim at expanding the
commodity trade with the Islamic republic.

Indonesia-Iran Relations
IndonesiaIran relations are particularly important because both nations, as
Muslim majority countries, are responsible for representing the Islamic world
globally, despite differences in their religious orientation. Indonesia has the
largest Sunni population in the world, while Iran is the only Shiite majority
nation in the world. According to a 2013 BBC World Service Poll, Indonesians'
perception of Iran has divided between 36% of them view Iranian's influence
negatively, and 34% expressing a positive view. Nevertheless, it is among
the most favorable perception of Iran in Asia and second most in the World.

Diplomatic relations between Indonesia and Iran officially began in 1951, but
ties between the two countries go back much further. They have been
important trading partners for each other, with bilateral trade volume
reaching $1.85 billion in 2011. Energy makes up a vital part of their
economic partnership. Iran had about $880,000 in oil and gas exports to
Indonesia in 2011. However, the sanctions on Iran in 2012 made bilateral
trade with Indonesia difficult.

Because of the sanctions, Iranian companies have participated in the oil and
gas industry independently, building refineries and other infrastructure. But
Iran now hopes to participate in the construction of ports, roads and other
needed infrastructure in Indonesia. Iranian companies are eager to join the
Indonesian governments massive infrastructure expansion plan.

Lift of Sanctions on Iran

In 2016, many of the international sanctions on Iran have been lifted.
However, while the lift includes the embargo on oil imports, there remains
significant sanctions on Iran. These measures include penalties on
international businesses and banks that do business with companies
controlled by the Iranian Revolutionary Guards the sort of secondary
sanctions that could still make some governments reluctant to re-enter the
Iranian market.

Sources:
Hunter, Shireen. Iran's foreign policy in the post-Soviet era: resisting the new
international order. ABC-CLIO, 2010. ISBN 9780313381942.
Nanda, Prakash. Rising India: Friends and Foes. Lancer Publishers, 2008. ISBN
9780979617416.
Indias Iran calculus. Foreign Policy magazine. Retrieved 1 January 2011.
Irans major oil customers, energy partners, Tehran Times.
Aneja, Atul (August 15, 2013). "Iran detains Indian tanker carrying crude,
wants undertaking". The Hindu. Chennai, India. Retrieved August 15,
2013.
Iran, and greater West Asia. Retrieved 22 May 2016
S. Mehdudia (March 2013). "India not to halt imports from Iran". The Hindu
The Oil and Gas Year http://www.theoilandgasyear.com/interviews/trade-
between-iran-and-indonesia/