Ebrahim Raisi’s death a setback for India in terms of navigating US sanctions and Sino-Indian competition in West Asia

If there’s one place where India’s policy of multi-alignment and strategic autonomy have been severely tested, it’s Iran, where New Delhi’s strategic imperatives and need for regional stability have remained stuck in an American quagmire. Ebrahim Raisi, at least for India, was part of the solution. His death complicates things.

The 63-year-old Iranian president, along with foreign minister Hossein Amir-Abdollahian and other officials, were killed on May 19 when their Vietnam War-era Bell 212 chopper crashed into the mountains of a foggy forest near Iran-Azerbaijan border, adding even more volatility to an unstable region. So remote was the location that the crash site remained untraceable and inaccessible for hours, and nothing survived except the debris.

Some may say ‘the Butcher of Tehran’ met a fitting end in view of the hardline cleric’s role as a key member of the infamous ‘death commission’ that had executed thousands of political prisoners in 1988. His death saw public mourning as well as muted celebrations in some sections of Iran’s divided polity.

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Many haven’t forgotten the brutal crackdown in 2022 on widespread protests that followed the death in custody of Mahsa Amini, who was arrested by Iran’s morality police for her ‘incorrect’ wearing of a headscarf. Amini’s death triggered a ferocious pushback led by Iranian women, many of whom took off their hijabs and burnt their headscarves during public demonstrations. In response, the Islamic regime that enforces a strict dress code for women let loose lethal force on protestors, killing more than 500 people according to some estimates.

“Acts of chaos are unacceptable,” Raisi had said. He wasn’t just unpopular, but also not very efficient. Iranian regime’s supreme leader Ayatollah Ali Khamenei has full power over the executive, judiciary, and legislative branches of government. He also decides policies on national security and foreign affairs, leaving the economy and day-to-day running of the administration for the president.

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As it turns out, the Iranian economy tanked during Raisi’s three-year tenure. Rial, the currency, shed over 30 per cent of its value against major currencies since January, inflation surged to over 40 per cent and food prices soared through the roof, creating widespread public discontent.

Iranian media quotes Farshad Momeni, an economist and university professor, as saying that the “economic situation of the Iranian people is critical” and “30% of the country’s population is below the poverty line… while another 40% are on the verge of falling below the poverty line with the current methods of wage determination.”

Under the circumstances, the decision of the Narendra Modi government to announce a day’s national mourning for Raisi’s demise has raised a few eyebrows. It needn’t have. India doesn’t have the luxury of moral activism in conducting foreign policy. Pragmaticism demands that India develop and maintain its civilisational and strategic links with Iran, a key actor in West Asia and India’s gateway to central Asia, and in terms of bilateral relationship Raisi’s tenure as president brought cordiality, stability and reopened opportunities amid a strenuous geopolitical climate.

His death can be construed as a setback to India, especially in light of Sino-Indian competition for influence in West Asia, and it also offers a sombre moment for reviewing the ties through the vagaries of America’s Iran policy because India’s infrastructural and trade partnership with Iran have always been subject to the America’s unpredictability, its economic sanctions or the threat of it.

The Chabahar deal, signed just a few days before Raisi and foreign minister Amir-Abdollahian met premature ends, is the latest case in point. No sooner did India announce that it has entered into a 10-year contract with Iran on developing and operating the Shahid Behesti terminal at Chabahar, Iran’s only deep-sea port that boasts of direct ocean access, than the US issued a fresh threat of sanctions.

On being asked about the deal between Indian Ports Global Limited (IPGL) and Port & Maritime Organisation of Iran under which IPGL will invest about $120 million and offer a credit facility of another $250 million for infrastructural development, a spokesperson of the US State Department warned that “any entity, anyone considering business deals with Iran are opening themselves up to the potential risk of sanctions.”

The Americans should have known better. External affairs minister S Jaishankar said the project “will benefit the entire region” and asked Washington not to take a “narrow view”. The minister wasn’t speaking through his hat. The Chabahar port project has been of interest to India for decades, and is a pointer to those blind spots in US-India partnership where India’s strategic interests have been sacrificed on the altar of America’s priorities.

In a measure of the importance of the project, the seeds of which were sown during prime minister Modi’s meeting with Raisi on August 2023, India’s Union shipping minister Sarbananda Sonowal was sent to Tehran to oversee the signing of the agreement.

Chabahar not only allows India access to landlocked Afghanistan and resource-rich central Asia, bypassing the noxious influence of Pakistan and its ports in Karachi and Gwadar – thereby stealing a march on China – but it also simultaneously acts as a transit hub for Eurasian trade routes. The port project also pulls Iran into the vortex of economic activity that has largely passed it by even as West Asia’s geopolitics and geoeconomics are witnessing a transformation.

India has been an integral part of this churn in the region that was catalysed by the Abraham Accords (between Israel, Bahrain, and the UAE) and the realization among key actors in the region that they cannot afford to remain cut off from the economic integration being driven by India and China to connect the Eurasian landmass and stimulate economic growth.

With the conception of IMEC connectivity project, the formation of I2U2 (India, Israel, the UAE and the US) and Abraham Accords, and the normalisation of ties between Israel and Saudi Arabia hanging in the air, the major players in West Asia were all being nudged together by the US – with Indian participation as a key component – to merge into a transregional order that Egyptian scholar Mohammed Soliman terms the ‘Indo-Abrahamic Accord’.

Iran feels bypassed by these developments and casts a wary eye at India at being left out. This sets the stage for the Chabahar deal that may also be interpreted as India’s signal to Iran that it is not being sidestepped, fortuitously timed to take advantage of the fresh turmoil in the region following Israel-Hamas war that delays the implementation of the connectivity projects such as the IMEC.

A lot is riding for India on Chabahar. There’s a reason why New Delhi has pursued the project with dogged persistence despite repeatedly being thwarted by American sanctions and pressure from Washington to sever ties with Tehran.

The Chabahar port project, namely the ‘ Chabahar Agreement’ was a tripartite agreement signed between India, Iran and Afghanistan in 2003 after the groundwork was laid by then prime minister Atal Bihari Vajpayee and Mohammad Khatami.

The New Delhi Declaration during Khatami’s visit to New Delhi for Republic Day celebrations in 2003 refers to the tripartite agreement “to develop the Chahbahar (sic) route through Melak, Zaranj and Delaram” to “facilitate regional trade and transit, including to Afghanistan and Central Asia, contributing thus to enhanced regional economic prosperity.” As part of the ‘North South Corridor’, now INSTC, the project was expected to link India “through Chahbahar to the National Iranian Rail Road” fostering India’s connection to Central Asia and Europe.

As Suhasini Haidar observes in the Hindu, “In 2005, India also began the perilous construction of Route-606 or the Zaranj-Delaram Highway, which connected the border crossing from Iran to the rest of Afghanistan, in order to facilitate the trade. Its importance gleaned from the sacrifices made for it — as many as 135 personnel working on the highway were killed in attacks by the Taliban, including six Indian border road and ITBP personnel.”

For a project of such import, it frequently ran into rough weather due to western sanctions on Iran over its nuclear programme and India’s proximity with the US, resulting in frequent stalling, slow progress along with curtailing of trade and energy partnership with Iran.

India saw an opportunity to ramp up the pace again as Iran signed the nuclear deal (Joint Comprehensive Plan of Action JCPOA) with the P5 nations and the European Union in 2015, brokered by the Barack Obama administration, and received some sanctions relief.

Prime minister Modi promptly went to Tehran in May 2016 and signed a trilateral agreement with then Iranian president Hassan Rouhani and former Afghan president Ashraf Ghani to develop the first phase of the Shahid Behesti Terminal at Chabahar through an estimated investment of $500 million for a series of projects.

In what was the first visit by an Indian prime minister in Iran in 15 years, Modi had said” “We want to link to the world, but connectivity among ourselves is also a priority. The corridor would spur unhindered flow of commerce throughout the region. Inflow of capital and technology could lead to new industrial infrastructure in Chabahar.”

I have gone into some detail over the Chabahar files to lay out the difficulties that India faced in navigating American sanctions on Iran and the unpredictability of America-Iran relations that remain tense and forever at risk of direct confrontation. What complicates matters even further is that Iran’s status as a pariah nation is a matter of bipartisan consensus in Washington. Both parties frequently indulge in one-upmanship over Iran to show who is stricter. For example, former president Donald Trump slammed Joe Biden for Iran’s recent attack on Israel and claimed that it wouldn’t have happened had he been in the Oval Office.

True to his form, Trump unilaterally pulled out of the JCPOA deal during his tenure in 2018, reimposed all sanctions on Iran, and a year later in April 2019 as part of a “maximum pressure campaign” ended all waivers that China, South Korea, Japan, Turkey, Italy, Greece, Taiwan, and India had carved out leading to a complete halt in India’s buying of hydrocarbons from Iran.

The sanctions also affected India’s development of Chabahar-Zahedan railway link, and in 2020, four years after Modi had inked the deal to construct the railway line, Iran shunted India out of the project citing delays and claimed that it will go it alone.

Except that it wasn’t so simple. Suddenly China’s name was thrown into the Chabahar mix. Nikkei Asia reported in 2020, the year that Iran excluded India from the Chabahar-Zahedan rail link, that China and Iran are close to signing a proposed $400 billion economic and strategic agreement. The newspaper claimed that it is in possession of an unverified 18-page document of the proposed 25-year deal under which “China will invest $280 billion in Iran’s oil and gas industry and $120 billion in production and transportation infrastructure.”

Though China’s link with Chabahar project wasn’t explicit, it remained a strong possibility. As scholars Soroush Aliasgary and Marin Ekstrom wrote in The Diplomat, “While China has yet to directly insert itself into the Chabahar port project, many analysts perceive the recently signed China-Iran 25-year cooperation program, in which China agreed to invest $400 billion into the Iranian economy in exchange for discounted and guaranteed energy prices and BRI project cooperation, as a way to gradually assert its presence in the port. While the scope of Sino-Iranian interaction in Chabahar port remains limited at this point, evidence of intensified Chinese activity with Iran suggests that it is attempting to compete with India for greater influence in the region.”

A nervous India, apprehensive of suffering a strategic defeat at the hands of its biggest adversary, dispatched the Indian foreign minister to Tehran in September that year to ensure that Chabahar doesn’t fall into Chinese hands.

To understand the role played by the Raisi administration in India finally signing a 10-year contract on Chabahar and not being upstaged by China, one must consider Jaishankar recent comments in Kolkata, before the Iranian president was killed in the accident, that it was “because of their (Raisi and Amir-Abdollahian) interest and their initiative that we were actually able to finalize a long-term agreement.”

During his recent visit to Pakistan, undertaken last month, Raisi had refused to back Pakistan prime minister’s attempts at equating the situation in Gaza with that of Kashmir while talking to the media. The Iran-Pakistan joint statement did mention Kashmir but it was a boilerplate reference that New Delhi took in its stride.

In absence of Raisi, and American election season shortly ahead, it will be interesting to see how India navigates the sanctions minefield in achieving its strategic objectives, and whether or not America holds India-Iran ties to ransom again.

The author is Deputy Executive Editor, Firstpost. He posts @sreemoytalukdar. The views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.