Subject: International Relations

India's relationship with Iran has been historically strong, marked by civilizational ties and strategic cooperation. The ongoing US-Iran nuclear controversy presents both challenges and opportunities for India's national interests.

Impact on India's National Interests

Energy Security:

• The sanctions have forced India to reduce Iranian oil imports from 9% (2018-19) to near-zero levels, impacting energy security and pricing.
• Diversification to other suppliers like Saudi Arabia and USA has increased India's import costs due to higher freight charges and insurance premiums.

Economic Relations:

• Bilateral trade witnessed a sharp decline from USD 17.03 billion (2018-19) to USD 4.77 billion (2019-20) post-JCPOA withdrawal.
• Indian businesses, particularly in pharmaceuticals and agricultural products, face payment mechanism challenges due to SWIFT restrictions.

Strategic Interests:

• The controversy affects India's Chabahar Port development, crucial for:
  • Access to Afghanistan and Central Asian markets.
  • Countering China's Belt and Road Initiative.
• Impacts India's role in International North-South Transport Corridor (INSTC).

India's Response Strategy

Diplomatic Balancing:

• Maintain strategic autonomy through multi-alignment policy.
• Continue engagement with both US and Iran through diplomatic channels.
• Support peaceful resolution through IAEA framework.

Economic Measures:

• Develop alternative payment mechanisms like Rupee-Rial arrangement.
• Strengthen trade relations with other regional partners.
• Explore opportunities in non-sanctioned sectors.

Strategic Initiatives:

• Accelerate development of alternative connectivity projects.
• Strengthen partnerships with Gulf Cooperation Council countries.
• Enhance cooperation in areas like counter-terrorism and regional security.

India must navigate this complex situation through strategic autonomy while balancing its relationships with both US and Iran. The focus should be on protecting core national interests while promoting regional stability and economic growth through diplomatic engagement and strategic partnerships.