Govind R. asked: What is the idea behind the formation of I2U2? How far India's participation in the I2U2 will affect India–Iran relations?

Md. Muddassir Quamar replies: The I2U2 is a mini-lateral initiative among India, Israel, the United States (US) and the United Arab Emirates (UAE) with the stated objective of “expanding economic and political cooperation in the Middle East and Asia, including through trade, combating climate change, energy cooperation, and increasing maritime security.” The idea is to synergise the strengths of the four countries to find sustainable solutions to serious problems in the area of water, energy, transportation, space, health, and food. It is a unique initiative as it aims to harness the logistical might and political influence of the US; the stature, human resource and vast market of India; and Israel’s technological and scientific advancements and UAE’s business acumen and financial heft to transform the economic realities in the Middle East and Asia. Hence, the focus of the I2U2 is on human security and geo-economics.

However, there is a view that the I2U2 has an underlying geopolitical objective to contain China and counter Iran. Some analysts have compared it to the Indo-Pacific centred Quadrilateral Security Dialogue (QSD), or Quad, between India, the US, Japan and Australia. This has also led to the grouping being termed as ‘Mini-Quad’ and ‘Middle East Quad’. However, there is a lack of consensus among the four partners so far as China and Iran are concerned. On China, while Indian and American views align, Israel and the UAE remain unsure. On the other hand, while there is a near consensus among the US, Israel and UAE on Iran, India is more cautious.

This also brings us to the second part of the question on the impact of I2U2 on India–Iran relations. Notably, despite the apparent effect of the stringent sanctions on Iran by the US, after withdrawal from the Joint Comprehensive Plan of Action (JCPOA) in May 2018, on bilateral trade and energy imports, Indo-Iranian relations have progressed well in other domains. New Delhi and Tehran have a shared interest in the stability and security of Afghanistan and have a similarity of views on the actions of the Taliban regime. They also cooperate in the development and operation of the Chabahar Port and continue to work towards improving connectivity to Afghanistan and Central Asia. Nonetheless, there are challenges, especially given the lack of clarity on the fate of JCPOA and Iran’s adversarial relations with India’s close strategic partners such as the US, Israel, the UAE, and Saudi Arabia limiting the relations.

Indian decision to participate in the I2U2 and continue bilateral relations with Iran simultaneously should be seen in the larger context of India’s evolving Middle East (West Asia) policy, wherein New Delhi has focused on multiple alignments to advance its economic and security interests while maintaining neutrality in regional conflicts and rivalries. The I2U2 is yet another step towards achieving greater economic interdependence with the Middle East. Since the focus of the initiative is on geo-economics and human security, it is unlikely to adversely impact India’s bilateral relations with Iran at this stage.

Posted on 23 December 2022

Views expressed are of the expert and do not necessarily reflect the views of the Manohar Parrikar IDSA or the Government of India.