In News:

• At the Shanghai Cooperation Organisation (SCO) meeting in Samarkand, Uzbekistan, PM Modi met Iran’s President Ebrahim Raisi and discussed India – Iran relations and the progress on Chabahar port development project.

What’s in today’s article:

• India – Iran relationship (History, during cold war, economic ties, etc.)
• About Chabahar port (Location, significance, status, etc.)

India – Iran relationship:

• India-Iran relations span centuries marked by meaningful interactions.
• The two countries shared a border till 1947 and share several common features in their language, culture and traditions.
• Independent India and Iran established diplomatic links in March 1950.
• Both South Asia and the Persian Gulf have strong commercial, energy, cultural and people-to-people links.

Relations between 1950 and 1991:

• During much of the Cold War, relations between India and Iran suffered due to their differing political interests.
• India endorsed a non-aligned position but fostered strong links with the Soviet Union (USSR), while Iran was an open member of the Western Bloc and enjoyed close ties with the United States.

Post-Cold War Era:

• Iran's continued support for Pakistan in the India–Pakistan conflict and India's close relations with Iraq during the Iran–Iraq War greatly strained bilateral ties.
• However, in the 1990s, both India and Iran supported the Northern Alliance’s fight against the Taliban in Afghanistan.
• They continued to collaborate in supporting the broad-based anti-Taliban government, until the Taliban recaptured Afghanistan in 2021.
• India has expressed strong opposition to Iran's nuclear program.

Economic Ties:

• India-Iran bilateral trade during the FY 2020-21 was USD 2.1 billion, a decrease of 56 % as compared to USD 4.8 billion during FY 2019-20.
• Major Indian exports – rice, tea, sugar, fresh fruits, drugs/pharmaceuticals, man-made staple fibres, electrical machinery, artificial jewellery etc.
• Major Indian imports – dry fruits, inorganic/organic chemicals, glass and glassware, natural or cultured pearls, precious or semiprecious stones, leather, gypsum etc.
• Why has India stopped importing crude oil from Iran?
  • In 2019, due to the sanctions imposed by the US on Iran, India had stopped importing crude oil from the country.
  • Before 2019, India was the second biggest buyer of oil from Iran.
• Why it is in India’s favour to restart oil import from Iran?
  • Firstly, most of India’s refineries are adept to Iranian sweet oil.
  • Secondly, Iran trades oil for Indian rupee or goods.
  • Thirdly, transportation costs of goods from Bandar Abbas port and Chabahar port are lower.

About Chabahar Port:

• Chabahar Port is a seaport in Chabahar located in south-eastern Iran, on the Gulf of Oman.
• The port consists of two separate ports named Shahid Kalantari and Shahid Beheshti, each of which has five berths.
• In May 2016, India and Iran signed a bilateral agreement in which India would refurbish one of the berths at Shahid Beheshti port, and reconstruct a 600-meter-long container handling facility at the port.

Significance of the Port:

• The port is partly intended to provide an alternative for trade between India and Afghanistan as it is 800 kilometres closer to the border of Afghanistan than Pakistan's Karachi port.
  • At present, Pakistan does not allow India to transport through its territory to Afghanistan.
• In October 2017, India's first shipment of wheat to Afghanistan was sent through the Chabahar Port. In December 2018, India took over the port's operations.
• However, the sanctions imposed by the US in 2019 played a role in reducing India's involvement and investment in the USD 1.6 billion Chabahar–Zahedan railway project.