The Director General of IDSA Dr. Arvind Gupta initiated the discussion by highlighting the growing importance and recognition of this Dialogue. The Track II Dialogue provides a valuable opportunity to exchange views and keeps one updated of important developments in the backdrop of rapidly changing geopolitical landscape. In addition, the Dialogue assumes even greater significance especially at a time when the security situation in the Gulf and West Asia is still evolving, when both Syria and Egypt are in turmoil, when leadership changes in Yemen, Tunisia and Morocco have taken place and when Israel-Palestinian relations have taken a turn for the worse.

Iran’s strategic importance for India cannot be underestimated; the close historical, cultural and civilisational ties between India and Iran often help to resolve outstanding issues within the spirit of mutual cooperation and understanding. The recent visit of Prime Minister Dr. Manmohan Singh to Tehran will provide a real impetus to the bilateral ties.

Dr. Gupta argued that Iran continues to be an important regional player and the relationship between Iran and Saudi Arabia will have a major impact on regional stability. India’s political, security and energy interests are involved in this region on both sides of the Gulf. The large Indian Diaspora in the region, at around 6 million, keep India actively involved in the region that is significant for India in securing its growing energy needs. Iran continues to be a major source of oil for India despite the reduction in supply due to payment related obstacles. He emphasized that India seeks to maintain good relations with Iran despite unilateral economic sanctions being imposed on the latter.

The Director General of IPIS Dr. Mostafa Dolatyar, in his opening remarks, highlighted the rapid developments in the West Asian region and observed that these developments affect Iran in one way or the other. He labelled the developments in the Arab World as ‘Enlightenment’ and ‘Islamic Awakening’, akin to the Iranian Revolution. Dr. Dolatyar argued that the evolving situation was an opportunity for nations of the region to awaken politically, remove dictators, curb corruption and more importantly get rid of their dependence on western powers. He also added that this awakening is forward-looking and cannot be undone. He drew similarities in the nature of street slogans and protests across the region to the one witnessed in Iran during the Revolution and observed that Iran can connect to the evolving situation in the region.

On the issue of sanctions, he observed that Iran has been living with them for the last three decades. Even though the sanctions were against humanity, the Iranian society has managed to cope and survive. However, the sanctions have hit the availability of certain medicines (Iran produces 97 per cent of its population’s medicinal requirements) and the banking sector. This clearly highlighted the criminal nature of the western countries.

On the issue of Iran’s nuclear programme, he stressed that it was Iran’s legitimate national right to develop peaceful use of nuclear energy as per the NPT guidelines, and that Iran had been vocal and sensible in its approach towards it. He voiced his criticism of the double standards of the West when dealing with Iran’s nuclear programme.

Dr. Dolatyar argued that no country in the modern world can deal with all its challenges alone, and therefore strategic and reliable partners are needed. Iran and India share many interests and concerns and Indian Prime Minister’s visit to Tehran was an important event. At the same time, on the issue of India cutting down its energy imports from Iran, Dr. Dolatyar argued that in a world where developing countries are in need of energy and where there are more customers than producers , Iran will find alternatives. It is up to India to have a vision which enables to identify its strategic and reliable partners for the future. Iran has traditionally been a reliable partner and follows a pragmatic and principled foreign policy. On the developments in Afghanistan, Dr. Dolatyar emphasized that the situation was a ‘mess’ created by the Western powers. However, there is a tremendous cooperative potential for Iran and India to explore for the country like they have done in the past.

Mr.Mohsen Pakparvar, Chargé d'affaires of Embassy of Islamic Republic of Iran in New Delhi, highlighted some key areas of cooperation which India and Iran should explore. These include cooperation in knowledge economy, trade and connectivity sectors and areas of education. He suggested organising more joint conferences, exchanging publications and translating the literature into the local languages.

He elaborated on the recent developments in the proposed Iran-Pakistan-India (IPI) gas pipeline. While Iran has finished its part, Pakistan will soon start implementing its share of the project. He hoped that India will join it in the future. Moreover, the feasibility study of deep sea pipeline project has been carried out and the matter now needs to be discussed. Iran also has a strong petrochemical base. It is ready to provide investment opportunities to Indian companies and they can export finished products to India. Mr. Pakparvar was hopeful that apart from the double taxation and investment protection agreements, the Joint Economic Commission (JEC) agreement will be signed in the future which should help expand bilateral ties.

Mr. Yash Sinha, Additional Secretary (Pakistan, Afghanistan and Iran Division), Ministry of External Affairs of Government of India, highlighted in his Keynote address the importance of Iran for India. India’s relationship with Iran in modern times has been built on the strong underpinnings of ancient links developed over the years, encompassing political, security, economic and cultural cooperation. Iran is an important source of energy for India and provides the country trade routes to Central Asia, Russia and Afghanistan. India’s involvement in Afghanistan has been largely predicated due to the availability of routes through Iran in the context of Pakistan denying India transit facilities through its territory.

Mr. Sinha observed that while India complies with UN sanctions, it does not recognise unilateral sanctions imposed by third countries. However, the very nature of sanctions imposed by the US and the EU has made the international trade environment significantly restrictive vis-à-vis Iran. India has initiated discussions with Iran on finding ways to tackle the fresh round of US sanctions expected to be enforced from February 2013. The new sanctions will close down certain routes of payment.

He argued that the reason for reducing crude imports from Iran is due to the prevailing sanctions which impose restrictions on shipping and payment options. However, India is committed to exploring ways to strengthen bilateral cooperation with the country and there is a need to mitigate the impact of sanctions as far as bilateral relations are concerned. The total volume of bilateral trade between the two countries was US $ 15.93 billion (exports to Iran US $2.398 billion and imports from Iran $ 13.54 billion) during April 2011-March 2012. A major portion of this bilateral trade is import of petroleum products by India from Iran.

Mr. Sinha emphasised that in order to sustain the level of trade and bilateral interaction, it is imperative that Iran imports more from India. Even though Dubai serves as an entry point, there should be an effort to improve direct trade and there exist many opportunities to this effect. There is a need to explore the possibility of greater cooperation in areas like food, pharma and medical equipment and other sectors which are not affected by sanctions. A proposal to export 200,000 tons of Indian wheat to Iran has been under discussion. In this regard he noted that it is ironical that Iran buys wheat from the US and not from India.

India‘s committed to the upgradation of Chahbahar Port was reiterated by Mr. Sinha. He congratulated Iran for completing its first phase and observed that India is exploring ways to be a part of phase two and three of this project. A trilateral meeting between India, Iran and Afghanistan took place in Tehran on August 26, 2012 at Foreign Secretary/ Deputy Foreign Minister Level on the margins of the NAM Summit. It was decided to form a joint working group to take forward the discussions on Chahbahar. Meanwhile, the Indian Ports Association has also submitted a detailed report on how India can participate in the project and the Indian government is studying the feasibility of the three recommended options. At the same time he emphasised that while most analysts have written off the IPI gas pipeline, India remains interested in the project since it can be an important source for the country’s energy security. However, the issues of security and price remain unresolved. On the issue of Afghanistan, Mr. Sinha was hopeful that India and Iran will continue to cooperate in future. It was noted that India is looking forward to the Joint Commission Sessions scheduled to be held in the future where a number of MoUs and agreements may be signed. India’s External Affairs Minister is expected to visit Iran in the near future. On the nuclear issue, Mr. Sinha emphasised that Iran has a right for peaceful use of nuclear energy while fulfilling its obligations owing to its membership of NPT. India has urged all sides that issues related to Iran should be resolved diplomatically, through discussions and negotiations.

On the current developments in West Asia, Mr. Sinha highlighted India’s policy which is governed by its long-term ties with the region and stressed that societies cannot be reordered from outside through military force and that people everywhere have the right to choose their own destiny. He reiterated India’s support of the Kofi Annan Six-point Peace Plan as a way forward in Syria. India also supports the creation of a United State of Palestine within the framework of a two-state solution based on the UNSC resolutions. He highlighted the strategic importance of West Asia and Gulf for India. Six million Indians who reside here contribute more than $35 billion in remittances. India’s economic engagement with the region is more than $160 billion per year and 65 per cent of the country’s energy requirements are met from the region. Continued peace and stability in the region is therefore of immense interest to India.