While delay in executing overseas projects is a common complaint against India everywhere (and needs to be rectified urgently), the speculated reasons for Iran easing out India, however, are New Delhi’s visible cosying up to Washington and some of its key allies in the Gulf including Saudi Arabia under the Modi regime, and recent developments in India. Recently, Iran’s spiritual leader Ayatollah Ali Khamenei had tweeted his concern about the Delhi riots and issued a rare criticism of India’s Kashmir policy after New Delhi enacted the J&K Reorganisation Act.

These issues have compounded the difficulties India is facing in doing business with Iran owing to the US sanctions. Now there is a new elephant in the room, China.

Indeed, the dramatic entry of China at a time when the world is busy fighting the Covid19 pandemic has caught India unawares. China and Iran are close to sealing an ambitious $400-billion deal on an economic and security partnership. Alarm bells should have run in New Delhi in 2016, when Chinese President Xi Jinping undertook a high-profile visit to Iran, about the same time as the Modi visit, and the two sides agreed to establish ties based on a Comprehensive Strategic Partnership, kicking off discussions aimed a 25-year bilateral pact. However, such were the delusions surrounding the budding bromance between Prime Minister Narendra Modi and Xi then that the development was swept under the carpet.

Since then, China has moved in to negotiate broader and deeper ties with Iran after the US under the Trump administration walked out of the nuclear deal with Iran in 2018. Today, both China and Iran see the Western Pacific and the Persian Gulf as regions of contestation with the US. It is only know that our foreign office mandarins are poring over the 18-page draft agreement put on the occasion. As per the agreement, China will facilitate the infusion of about $280 billion to buy oil from cash-strapped Iran and invest another $120 billion into Iran’s transport and manufacturing infrastructure.Iran is already a signatory of China’s Belt and Road Initiative.

 What is more alarming for New Delhi is the emerging security and military partnership  between Tehran and  Beijing. The partnership calls for “joint training and exercises, joint research and weapons development and intelligence sharing” to fight “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”. With a growing Chinese presence in Iran, India has reasons to be deeply concerned about its strategic stakes around the Chabahar port project. Nilly willy, India finds itself caught in the geopolitical rivalry between the US and China over Iran. New Delhi will have to extricate itself from this situation sooner than later and retrieve the lost ground in Iran. As it is, our exports to Iran have been falling sharply due to geopolitical tensions. They shouldn’t be allowed to fall further.