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Rajesh Samota asked: How the Iranian nuclear deal will affect the India-Iran and India-US relationship?

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  • Meena Singh Roy & M. Mahtab Alam Rizvi:


    The Iran nuclear deal will have a positive impact on the India-US relations. India's growing ties with the US have long been viewed negatively in Iran. It has been an important factor impacting the India-Iran relations. Both the US and Iran had more expectations from India than from China. Due to the US-EU sanctions, India's oil trade with Iran had suffered but now the scenario is expected to change. As a result of the nuclear deal, India's relations with Iran will no more be seen negatively in the US and there will be no more pressure on India to scale down its economic and energy ties with Iran. In fact, it might open up opportunities for India and the US to work together with Iran on issues of common interest.


    The excitement generated by the very prospect of lifting of trade sanctions on Iran, and its positive fallout on an energy-deficient India, has energised India’s government machinery looking to revive its commercial ventures in Iran. While oil is the main component of India’s trade relations with Iran, India has other commercial interests too. Perhaps, India’s long wait for clearance to develop the Farzad-B gas field may soon be over. It was India’s ONGC Videsh Ltd. (OVL), the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), which had discovered the gas field in 2008. Meanwhile, India is already investing in the development of the strategically-important Chabahar Port.

    The Iranian Ambassador to India, Gholamreza Ansari, recently said that India should seize on the opportunity and take advantage of its presence on the ground to be ahead of the Western countries that would start making investments after lifting of sanctions. Ansari also said that the Iranian President Hassan Rouhani had proposed a greater role for India in his meeting with the Indian Prime Minister Narendra Modi on the sidelines of the Shanghai Cooperation Organisation (SCO) Summit held recently in Ufa, Russia. Iran has invited Indian investments of about US$ 8 billion in its infrastructure projects. The Iran nuclear deal has clearly opened up huge opportunities for the two countries to enhance their bilateral trade including in sectors like food items, pharmaceuticals, gems and jewellery, auto components, textiles and medical equipment. In the past, bilateral trade could not be expanded due to problems of transaction through foreign banks.

    For more details, please refer to the following publication:

    M. Mahtab Alam Rizvi, “Breakthrough in Vienna N-talks will be win-win for all”, The Pioneer, July 04, 2015.

    Posted on August 26, 2015