[op-ed snap] Between the Elephant and the Dragon: India and China

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Mains Paper 2: IR | Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

From UPSC perspective, the following things are important:

Prelims level: Not much

Mains level: Why it makes sense for India and China to cooperate on Iran’s Chabahar project


News

The U.S. has decided to withdraw from the Iran nuclear deal

  1. But Iran has indicated that his government remains committed to that pact and that he would be negotiating with the deal’s remaining signatories to salvage the deal if possible
  2. Other signatories are the European countries, Russia and China

Chinese influence in Iran

  1. For Iran, a lot is riding on how these powers engage in the coming months
  2. India too has a lot at stake in this regard
  3. Iran’s attempt to woo Chinese investment in Chabahar, often projected as India’s pet project (and a response to Gwadar in Pakistan), has raised eyebrows in
  4. Post-sanctions, the development of the Chabahar port reflects Iranian quest for multilateralism, and China by default is an important player in the Iranian scheme of things
  5. China is one of the few countries which never severed its ties with Iran
  6. In fact, it had played a crucial role in bringing Iran to the diplomatic table to negotiate the P5+1 nuclear deal
    Trade
  7. China was also one of the countries that maintained steady trade relations with Iran even during the sanctions era. In fact, trade figures rose from $4 billion in 2003 to $53 billion in 2013
  8. A large chunk of China-Iran trade is petroleum-based products. China is the largest importer of Iranian oil
  9. China Development Bank has also signed a memorandum of understanding with the Iranian government worth around $15 billion

Defence cooperation between Iran and China

  1. China and Iran share substantial defence cooperation with each other
  2. After the 1979 revolution, Iran has been dependent on China for meeting its defence requirements
  3. China, being permanent member of the Security Council with veto power, could be of great strategic help for Iran when it comes to vetoing any proposal against Iran in the United Nations

A parallel, China-dominated global order suits Iran more than the U.S.-centric world order

What are the possible policy options for India?

  1. The strong relationship between Tehran and Beijing makes it pertinent for New Delhi to navigate its interests in the region accordingly
  2. To assume that Iran would help India counter Chinese influence in the region might be wishful thinking
  3. India needs to resist the temptation of falling prey to “excessive securitisation” in the case of Chabahar agreement in particular and India-Iran relations in general
  4. For India, to be an influential player in the region, economics and politics should complement and not substitute each other

What should be done?

  1. In collaboration with countries like Japan, India should offer favourable terms of trade in the region vis-à-vis China
  2. To consolidate its strategic depth in the region, India should focus on initiatives like frequent joint naval exercises in the Persian Gulf
  3. Iran, on the other hand, would do well by maintaining a fine balance between the elephant and the dragon
  4. Experiences of countries like Sri Lanka should encourage prudent thinking on the part of Iranian policy-makers

The way forward

  1. Some form of Chinese participation in the Chabahar project would be helpful for the future of the project, especially if the terms and conditions are clearly specified
  2. India and China are exploring joint economic projects in Afghanistan; they can surely also extend this engagement to the Chabahar
Foreign Policy Watch: India-China
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