New Regional Dynamics - India-Iran and Pak-Saudi Arabia Axes
iasparliament
February 01, 2019
What is the issue?
Two neighbouring countries, Iran and Pakistan, which were trying to remain close, are today moving in opposite directions.
Iran is becoming increasingly benefitted by India’s presence and Pakistan by Saudi Arabia's presence.
What are the recent developments with Chabahar, Iran?
Recently, India formally took over operations of the Chabahar port.
Senior bureaucrats of all the 3 countries, India, Iran and Afghanistan, held the first meeting for the implementation of the trilateral Chabahar agreement signed in 2016.
They agreed on the routes for trade and transit corridors, and finalised the protocol to harmonise transit, roads, customs and consular matters.
For India, Chabahar is important to reach out to Afghanistan.
Why is India's role crucial for Iran?
Iran needs India more than before, in the backdrop of the new round of American sanctions.
India could persuade the U.S. to exempt Chabahar from these sanctions as the port relates to reconstruction assistance and economic development of Afghanistan.
Good relations between India and the U.S, helped in the waiving of sanctions on oil trade against Iran.
[In late 2018, America granted waivers to 8 countries including India for importing oil from Iran till March 2019.]
New Delhi lobbied for such an exemption as Iran is India’s number one oil provider.
India and Iran are already working on a Preferential Trade Agreement (PTA) that would reduce tariffs on 80 to 100 products.
What is the case with Pakistan?
Pakistan needs to raise money from abroad to address its balance-of-payment crisis.
So Pakistan is once again pushed towards Saudi Arabia and the UAE.
In the past few months, the dependence on these two countries has significantly increased, with promises of aid and industrial, strategic investments.
Saudis committed to offer a $6 billion package, and the UAE committed to give $3 billion.
Besides, Riyadh decided to invest $10 billion in a refinery in Gwadar.
Why is Pak-Iran relations drifting apart?
Pakistan and Iran tried to improve their collaboration till recently, with mutual visits and offers on cooperation in missile technology.
Iran also expressed interest for branching the gas pipeline they have already built on China–Pakistan Economic Corridor (CPEC) at Gwadar and to connect Chabahar to CPEC too.
But notably, a Saudi-led coalition is fighting the Iran-supported Houthi rebels in Yemen.
Pakistan had made attempts to mediate between Iran and Saudi Arabia.
But upgrading its relations with Iran may become more difficult as saying “no” to Saudi Arabia may also become more difficult.
The implications of this dynamics are particularly negative for Pakistan.
Iran could play in Afghanistan a role that may not be in favour of Pakistan.
