Russian President Vladimir Putin and Indian Prime Minister Narendra Modi visit the Zvezda shipyardin Vladivostok, Russia, September 4, 2019. Photo: Reuters/Alexander Nemenov
Will there be a Moscow-New Delhi-Tehran trade corridor sans US?
By Haider Abbas
THE Russia-Ukraine war is now in its 11th month, and there are no signs of it ‘going- slow ’ as new war plans unfold with every passing day. Russia has been slapped with economic sanctions by the West in their overall strategy to bring Russia on its knees. But, Russia has not shown signs of fatigue and is raging with war against Ukraine. Iran which has been overtly supportive of Russia’s war, too has been reeling under economic sanctions from around five-decades, and no wonder, both the nations have come together to fight-the-economic-isolation, this time with India’s help.
News in Asia.Nikkei has informed about Russia-Iran-India coming together. ‘Russia and Iran are working on a new shipping corridor that cuts Europe and its sanctions out of the picture, and are looking to partner with India, which has kept its distance from the Western-led isolation campaign against the two countries. The plan is an answer to the U.S.-led push for “friendshoring,” an effort to relocate supply chains to allies and friendly countries.
This bonhomie between Russia, India and Iran is quite understandable as despite the sanctions on Russia, India has greatly benefitted from the purchase of heavily discounted oil from Russia, which kept afloat the Russian economic fortunes, and also made India cater to the needs of more than a billion people. But, ironically, the government in India did not relax the oil prices domestically! Iran too is into selling its oil to India, mainly through the grey-market, as India, due to US pressure, has almost stopped buying Iranian oil, since mid-2019. What however is also worth to speculate is despite the US sanctions on Russia and Iran, Russia remains to be the ninth largest economy while Iran retains an 11th rank on it.
Considering the weight and lure of the Indian market, it is quite a natural corollary for both Russia and Iran to look towards India, more so particularly, when both the nations have been handicapped by the US sanctions. The big question is will India become a partner to it? This probable trade-route or corridor is now almost complete, as construction is underway on 3,300 kilometers of railways throughout Iran, and 560 km of new track is set to open for operation by March. Completing all of these projects would expand the country’s (Iran) rail network by 20%. Iran seeks to leverage its potential as a transport hub between Asia, Russia and Europe. Moscow, New Delhi and Tehran signed an agreement back in 2002 laying out plans for the International North-South Transport Corridor, which would connect India and Russia through Iran and Azerbaijan, bypassing the Suez Canal. When Russian President Vladimir Putin visited Iran in July, he and counterpart Ebrahim Raisi agreed on the need to finish the Rasht-Astara rail link in northern Iran, part of the proposed route.’ However, what seeks to be answered is the intention of India to start to supply its missiles to Armenia, a foe of Azerbaijan and Iran alike!
It is worthy to note that Russia-Iran idea of mutual trade has been into for more than two decades and it is only now that India is entering this conglomerate, which has been strengthened by India’s neutral stand vis-à-vis the sanctions particularly on Russia, and hence, this shipping-corridor with India, which would bypass European sanctions, is now almost on the anvil. This coming together of these three nations is getting considered an-answer to US sanctions, but will the US be able to endure it? India through this move, will however, be able to placate Russia, if in case, things spill-out between China and India. However, in this new built scenario Iran is likely to get benefitted which is one of the worst bête noir of the US. Will the US not try to make India follow its line on Iran? These are the questions which are still in uncertain waters.
Iran has openly supplied its drones to Russia against Ukraine, inviting an ire from US, and now Iran has announced that it would import 9 million cu. meters of Russian natural gas a day through Azerbaijan. Iran’s national oil company and state-owned Russian energy giant Gazprom (have) signed a memorandum of understanding on energy cooperation last year worth $40 billion. A key issue will be winning over New Delhi, a strategically important player for the democratic camp in dealing with Russia and China. Iran’s Chabahar Port in its south would connect India with the rest of the corridor. Tehran and Moscow argue that the route would benefit New Delhi politically and economically. It would open up the possibility of more trade with resource-rich Central Asia through Iran, as well as further India’s goal of developing alternatives to the Belt and Road (BRI)link between China and the Pakistani port of Gwadar that New Delhi has opposed,’ elaborates the Asia.Nikkei report.
India and US have both been against China’s BRI project, from the day-one, but given this new developing situation, where India is also to cater to its large populace, such trade corridor with Russia and Iran, will help make India reach to the outside world i.e. Central Asian republics etc more openly, irrespective of US reservations. Moreover, this will also help India to make Russia remain ‘neutral’ if China and India are to be at war. Here the US is slated to help India, but will then Russia also remain neutral, particularly when China has remained supportive of Russia throughout the last 11 months of war against Ukraine. In fact Russia has in the past one year become the highest exporter of its oil to China and both the countries have started to trade in Rouble and Yuan, in order to De-Dollarize their economies!
How New Delhi is going to respond to this effort to relocate supply-chains is yet to be seen. India has restrained itself from ‘punishing’ Russia due to pressures from the West, and has also by-and-large remained neutral to the anti-Hijab protests inside Iran since September 2022, hence, India has gained in its stature for both countries. Russia is all likely to go ahead with its exports to reach Asia nations via Iran, will India also make use of Iran to reach the Asian market as well as to Central Asian nations, is all yet to unfold. Will the US make it happen under its nose? Will India step up to take the cudgels despite the US is all to be seen. However, for geo-political and economic wizards India is now on a threshold of new vistas of economic avenues. Let’s see what happens next.
Views expressed in the article are the author’s own and do not necessarily represent the editorial stance of Kashmir Observer
- The writer is a former UP State Information Commissioner and writes on international politics
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