Javad Zarif’s visit crucial for post-sanctions reset
Iranian Foreign Minister Javad Zarif's upcoming visit to India presents a crucial opportunity for both countries to chalk out plans for strengthening bilateral ties. This is Mr Zarif's first visit to the country since the signing of the landmark nuclear deal, which he led from the Iranian side and which will lift economic sanctions on Iran in return for Tehran curbing its nuclear weapons programme. If the deal is well-implemented, Iran will be on course to becoming a much stronger regional power and an important global player.
The current pressures on its oil trade will dissolve; and Iran's natural gas industry can be expected to receive a huge boost. The Iranian market will also open up even as the Government in Tehran looks to undertake major infrastructure projects. In each of these spheres, there is scope for greater Indian collaboration and participation — it is against this backdrop that Mr Zarif's visit must be viewed. In the oil sector, for example, Iran has traditionally been one of India's top suppliers but slipped through the ranks after the sanctions were put in place. A revision in this order is expected and the matter will surely be discussed during Mr Zarif's visit.
Another important issue is the payment of the $6.5 billion dollars that India owes Iran for the crude oil imported under the sanctions regime. In the natural gas sector, India will try to make a strong case for getting back into the Farzad-B gas field project. The gas field is part of the Farsi block in the Persian Gulf and India has already spent millions of dollars in initial explorations. In 2002, Iran had awarded India's ONGC Videsh ltd the contract for developing the gas field but cancelled it after inordinate delays in starting work. The other big project in this sector is the ultra-deepwater natural gas pipeline that will cut across the Arabian Sea, connecting Iran and India. Running for 1,400kms and more than two miles underwater, this will be one of the longest and deepest oil or gas pipelines ever built. Estimated to cost $4.5 billion, it has the potential to bring India 1.1 billion standard cubic feet of gas a day, effectively doubling an energy-starved India's gas supply.
In terms of trade ties, the lifting of sanctions allows India greater freedom and scope to ramp up commercial activity with and also via Iran. For example, Indian exporters stand to benefit from reduced shipping costs (which will make their wares cheaper in the international market) once private shipping lines begin operations from Iran. The big item on the agenda for Mr Zarif's visit will, of course, be Chabahar Port. Both India and Iran have been talking about this project for decades and, despite a host of memorandums of understanding, there has been little progress on the ground. Hopefully, the improved circumstances in both countries will provide the impetus needed to start work at Chabahar, which is not just commercially important to connect India with Central Asia and beyond but also strategically crucial.