Iranian Foreign Minister Mohammad Javad Zarif with Indian Road Transport Minister Nitin Gadkari, New Delhi, January 8, 2019
Facing a troubled economy and US sanctions, Iran is pursuing a high-profile campaign for links with India.
Foreign Minister Mohammad Javad Zarif arrived in New Delhi for meetings to promoted trade ties, including a speech to an international conference and attendance at a trade meeting sponsored by the Confederation of Indian Industry. Zarif is accompanied by senior executives from dozens of Iranian public and private companies.
The Foreign Minister began his meetings on Tuesday with a session with Indian Road Transport Minister Nitin Gadkari.
The discussion included India’s investment in the southern Iranian port of Chabahar.
Iranian State media offer support this morning with the headline, “India Begins Commercial Activity at Chabahar Port“, with a Cyprus-registered bulk carrier bringing corn.
The outlets also highlight a Reuters report that Indian State-run Bharat Petroleum is lifting a three-month suspension of Iranian oil imports, taking in 1 million barrels in February. Hindustan Petroleum renewed purchases of 1 million barrels in January, after a gap of six months.
Challenges to Tehran and New Delhi
Arriving at New Delhi airport, Zarif pointed to financial arrangements to bypass comprehensive US sanctions, including on Iran’s energy and financial sectors, “We have a good banking agreement with Indians, which was signed this fall and after [re-imposition] of sanctions, and this agreement allows our country to continue both exports and imports while meeting its financial needs.”
But Iran is facing significant hurdles to sustaining, let alone expanding, the economic relationship with India.
While New Delhi was one of eight leading Iranian oil customers to receive US sanctions waivers, these are only through the start of May and are conditional on a reduction of purchases. India is restricted to a total of 9 million barrels per month — a reduction of almost 60% from the levels of April to August 2018.
The Iranian-Indian relationship is also facing regional challenges. Pakistan’s new Imran Khan Government has pursued discussions with Saudi Arabia and the UAE, rivals of Tehran, which had led to Gulf investment in Islamabad and a revival of relations over both Middle Eastern and Central Asian matters.
Mohammad bin Zaid, the UAE Crown Prince, met with Khan last weekend and Saudi Crown Prince Mohammad bin Salman is due in Islamabad in February.