India-Iran: “Let’s Make A Deal”

Since the lifting of sanctions in January 2016, Iran has been a busy place. Delegations have arrived and deals have been made. It is quite simple: Iran is back and open for business. New partners have included China, South Korea, Italy and France. So it should not have been a surprise when India’s prime minister, Narendra Modi showed up in May of 2016. Modi is the first Indian PM to visit Iran in 15 years.

In addition to renewing friendship and going through the usual diplomatic kabuki, some important business was done centering on the Iranian port of Chabahar on the Gulf of Oman. The Hindustan Times reported on May 24, 2016 that India had pledged around $500 million for port development.

What was even more interesting was a trilateral meeting between the heads of India, Iran and Afghanistan, i.e. Modi, Rouhani and Ghani to develop a rail link running 500KM from Chabahar to Zahedan in Afghanistan. Up till now, India-Afghan trade had to pass through Pakistan and made it subject to all sorts of uncertainties. This line will also give India access to Iran’s rail network, open up Iran’s eastern regions, and lay the groundwork for further trade with central Asia. Of note is the fact that this Chabahar port/rail facility is only 72 miles (115 km) west of the Pakistani port of Gwadar that is a key element in China’s Belt and Road initiative.

Photo: Narendra Modi via flickr