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Iran plays Pakistan, China against India as Modi turns to Trump

India’s apparent decision to go along with the Trump administration’s “maximum pressure” campaign against Iran could negatively impact its relationship with Tehran, including in regard to the Chabahar port project.

Iranian Foreign Minister Mohammad Javad Zarif has recently kept busy with diplomatic visits to neighboring countries. On May 23, he arrived in Islamabad, his third trip to Pakistan since Prime Minister Imran Khan took office in August 2018, and held talks with Khan, army chief Qamar Bajwa, Speaker Asad Qaisar and his counterpart, Shah Mehmood Qureshi. Few details of the meetings were shared with the media, except for comments underscoring their focus on reducing tensions in the region and on connecting the Iranian port of Chabahar and the Pakistani port of Gwadar.

The fate of Chabahar has important consequences for relations between Iran and India, Pakistan's archrival. The port has been a focal point and pillar of an emerging partnership between Tehran and New Delhi over the past decade or so and is the only territorial facility that the Iranian government has been willing to lease to a foreign state. For India, Chabahar is vital to its strategies toward West Asia, Afghanistan and Central Asia. So far, India has notably managed to persuade the Donald Trump administration to exempt its presence there from sanctions. Yet, Iran is now talking about connecting Chabahar and the rival Chinese-Pakistani route, that is, Gwadar and the multi-billion-dollar China-Pakistan Economic Corridor (CPEC).

Iran has almost 3,100 miles of coastline on the Persian Gulf and Gulf of Oman with several ports better equipped than Chabahar, which is a relatively small and undeveloped facility in a poor and remote area. It has been willing to accommodate India’s use of Chabahar in order to enhance its strategic partnership with the rising Asian giant and to nudge it to become more involved in the region on Iran's side. Given these desired outcomes, Iran has been taking costly risks in the form of provoking Pakistan to react to the presence of its archrival on its western border. Of note in this respect is Pakistan's arrest of the alleged Indian spy Kulbhushan Jadhav, who held a valid Iranian visa and later claimed to have been guiding and supporting Pakistani terrorist groups from inside Iran in connection with India's consulate in Zahedan, and the April terrorist attack on the Karachi-Gwadar road, which Pakistan blames on Iran-based separatists. For Iran, hopes of strategic ties with India justify these costs.

Recent developments have, however, dashed some of Tehran's hopes. Iran was astonished in May when India stopped importing oil in compliance with the Trump administration’s unilateral sanctions. Previously, Iran had deemed India walking away from its third-biggest oil supplier as an unreasonable prospect, especially given the generous privileges granted to it and the complicated and long-discussed mechanisms by which India was supposed to pay for such imports.

Indeed, not many analysts, including this one, would have predicted what has unfolded. Even now, some observers believe that New Delhi made the decision in light of its recent parliamentary election campaign and the likelihood that Prime Minister Narendra Modi did not want a distraction in the form of tensions with the United States. This line of thinking suggests that India will probably soon resume energy imports from Iran, as some government sources have asserted.

None of this, however, is likely to alter Iran’s frustration with the situation. It was therefore probably not an accident that in Islamabad, Zarif proposed connectivity between Chabahar and Gwadar and also signaled that Iran and China are on the same side in their confrontations with the Trump administration. An added dimension of this posturing appears to be Iran signaling to India that Chabahar will no longer be an “exclusive” Indian route to Afghanistan and that New Delhi’s position as Tehran’s first choice for collaboration in the region is now slipping away. Accordingly, Iran could be seeking to achieve several goals with its new proposals to Pakistan.

First, Iran is trying to attain a “psychological” rather than an economic objective, Tehran-based scholar and specialist in Chinese-Iranian relations Mohsen Shariatinia, told Al-Monitor. “Iran is trying to avoid promoting Chabahar as a rival to Gwadar, and it is the reason that it is suggesting cooperation and connectivity between the two projects,” Shariatinia said. In this way, Iran can regain Pakistan’s trust, which is much-needed considering the tensions between Iran and Saudi Arabia and the elevated tensions between Iran and the United States in the Persian Gulf.

Second, it could provide a way for Iran to make use of its costly natural gas pipeline to Pakistan. Iran has invested more than $1 billion in the pipeline and has completed its side of the project, from the South Pars gas field to the border with Pakistan. Islamabad has not fulfilled its commitments for the project, part of the controversial Peace pipeline, since 2014 the IP pipeline, and there is no prospect of it doing so anytime soon. Connecting Chabahar to Gwadar could entail linking the natural gas pipeline to the LNG terminal and refinery facilities at the Pakistani port. Even though Shariatinia told Al-Monitor that “Iran prefers to build refinery facilities in Chabahar rather than exporting its raw products to Gwadar’s refineries,” there are still economic benefits for Iran in this regard, especially since its efforts to build LNG terminals have failed. Indeed, access to Gwadar’s LNG terminal could aid Iran’s trade in natural gas.

Third, it could send a positive signal to China about Iran’s resolve to get more engaged in the One Belt One Road (OBOR) initiative. Beijing has always considered Tehran a vital part of the project, but the Iranians have not always met Chinese expectations in this regard. Iran’s hesitation about deeper involvement in OBOR is partly due to preferring its own transit strategy, which seeks to develop the Chabahar route to Afghanistan and Central Asia and connect it to the International North-South Transport Corridor. This would turn Chabahar into an important hub, connecting the Indian Ocean to eastern Europe and landlocked Central Asia. India has been a crucial part of this strategy, but with emerging doubts about long-term ties with Iran as a result of US sanctions, the proposed connectivity between Chabahar and Gwadar could signal a change in Iranian priorities.

Fourth, by connecting Chabahar to Gwadar, Iran could balance Saudi Arabia’s desire for a presence at the port. Earlier this year, Riyadh announced its willingness to invest $10 billion in refinery installations in the Pakistani project. Against this backdrop, connectivity between Chabahar and Gwadar could help Iran thwart Saudi efforts to project its influence on Iran’s eastern border and could also induce Islamabad to rebalance its relations with Tehran and Riyadh.

None of this is good news for India. Should genuine connectivity between Chabahar and Gwadar be forged, India will in effect see two of its main goals at Chabahar go up in smoke: counterbalancing China’s presence in the region and providing an exclusive route to Afghanistan and Central Asia that bypasses Pakistan. Iranian-Pakistani transit collaboration would also be problematic for US aims in Afghanistan, where Washington has long complained about Islamabad's unconstructive role in peace talks.

Chabahar is an alternative trade route for landlocked Afghanistan that could reduce Kabul’s dependence on Pakistan. Indeed, this is the logic for the US exemption of the Iranian port project from sanctions. By linking to the port at Gwadar, however, it looks like Iran aims to throw a wrench in US plans.

In sum, connectivity with Gwadar flies in the face of Iran and India’s mutual long-term interests in Chabahar. Yet, Iran principally attaches equal importance to its relations with states such as China and India. Iran is also aware that the full potential of Chabahar could be met in parallel to the CPEC and Gwadar rather than in collaboration with it. Chabahar, however, cannot be treated as an isolated island in Iran’s foreign policy preferences. If US sanctions have forced India to reconsider its energy trade with Iran, then India should accept the consequences of its decisions on other aspects of its bilateral relations with the Islamic Republic.

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