INDIA & Irans Foreign Trade Relations

From : Parag Gautam Anoop Goel(GL) Deepak arora Vivek saini Sunny Gambhir Hardik kapoor

IRAN
1% of the worlds population, 7% of the worlds natural reserves including -10% of the global proven oil reserves -16% of the worlds natural gas resources. 130 b barrel oil (17 billion tons) 27 trillion cm gas which means $3000 billions

Counties with Oil Reserves > 1 bill. t and Strategic Ellipse

What would be Iran after 20 Years?

The first country in the region at economic, scientific and technology levels line of thinking, i.e. the prioritization of becoming an economic and technological power over other policy areas, is very evident in Irans 20-Year Perspective Document which has produced the first ever official long-term macro strategy of the Islamic Republic.

Iran and its Subregions

Middle East Persian Gulf South West Asia Central Asia, Caucasus, and Afghanistan Caspian Basin

IPI
IPI passed through three phases: Phase One: Energy security & Indo Pak differences. Phase Two: Energy Security and Peace dividend. Phase Three: Strategic returns/constraints and energy security.

THE STORY LINE

Idea was first tossed in1989. India Iran MOU in 1993. Indian Cabinet approved the of the project in 2005. Technically feasible & economically win-win with huge Confidence Building dividend.

PIPELINE ROUTES: AN IMPRESSION

Bottlenecks and Pipelines 11 oil pipeline projects/ 6 operational 6 natural gas pipeline projects/2 operational. Of particular notice: CPC BTC TCP
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Significance of Iranian Gas

Indian Domestic Supply: 170 mmscmd Import : 80.00mmscmd Total supply: 250mmscmd Adding:18(Iran)LNG)+9(EnnoreMysore)+60(IPI )+40(TAPI)=127mmscd. Grand Supply =250+127=377mmscd Estimated Demand=263 to 314mmscd Surplus:377-314=63 Iran supply is 60+18=78 or 30+18=48

Demand-supply gap

 If one looks at India's exports to Iran, one finds that India's major items of export included drugs, pharmaceuticals & fine chemicals iron ore, machinery & instruments and rice other than basmati, inorganiclorganic, agro chemicals manufactures of metals miscellaneous processed items and other cereals including wheatmeat & preparations; oil meals; tea and processed m inerals. So far as India's imports from Iran are concerned apart from the major item i.e. petroleum and petroleum products, other impbrtant items include organic chemicals, fruits & nuts excluding cashew nuts, inorganic chemicals, iron & steel, etc

Irans Membership in Regional/International Organizations

United Nations and its institutions ECO (Economic Cooperation Organization) OPEC (Organization for Petroleum Exporting Countries) ICO (Islamic Conference Organization) North-South Corridor D8 (Islamic Developed Countries) Non-Aligned Movement
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CURRENT SITUATION
Relations between India and Iran are far-reaching and multi-dimensional. The two states have recognized that they have a lot to offer one another and have acted to expand cooperation in a number of key areas. Energy Security Political & Strategic Considerations Counterterrorism and Regional Stability Defense Cooperation

POTENTIAL BARRIERS
NO INDEPENDENT FOREIGN TRADE POLICY. USA ITSELF IS A MAJOR HURDLE. If the United States reaches a point at which it will engage Iran in some capacity, India could provide a helpful role. New Delhis close relationship with Iran, the United States, and Israel puts it in a unique position as a potential intermediary, similar to Chinas role in the Six Party Talks with North Korea

Communication gap. Gas Industry Yet To Develop. Foreign Investment. Political Instability.

HOW TO IMPROVE RELATIONS?

Because of Irans strategic importance and its own goal of ensuring a stable energy, it is difficult for New Delhi to abandon its relationship with Tehran. India should therefore pursue the following policy objective: Distinguish sharply between Irans nuclear position and other areas of cooperation. While India will continue cooperation with Iran in pursuit of its own national interests, New Delhi should make it clear that it will continue to strongly support American efforts to bring Iran into legal compliance over its nuclear program. Voting against Iran in the IAEA for failing to satisfy its international obligations over its nuclear program, while simultaneously resisting American pressure to abandon the IPI gas pipeline project, is an effective illustration of New Delhi pursuing such a nuanced foreign policy.

RECOMMENDATIONS
Given that New Delhi is unlikely to totally sacrifice its energy and strategic interests with Tehran for its relationship with Washington, the United States should also adopt a more nuanced foreign policy towards India. The United States should therefore pursue the following policy priorities: Refrain from publicly expressing disapproval of Indo-Iranian ties except in areas that directly impact U.S. security, such as Irans nuclear and military expertise and concrete defense enhancements. Such prioritizing takes into account Indias national interests and independence but at the same time fulfills principal U.S. objectives. Explore the possibility of using India as a mediator between Washington and Tehranin relation to the nuclear question. Doing so would convey to New Delhi that Washington genuinely considers India a rising power with a role to play in international affairs, a recognition New Delhi has sought to secure.

Conclusions:
Irans Foreign policy is facing serious challenges during Irans 20-Year Perspective. Most of challenges are related to Iranian borders with its neighbors. Energy demand and supply equilibrium has dramatic impacts on Iran. United States different approaches to Iran will change Irans destiny. Looking to East is one option for Iran
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