India's Trade with Iran
Essay by ravitrivedi • February 15, 2017 • Research Paper • 3,683 Words (15 Pages) • 1,033 Views
Table of Contents:
1 | Introduction | 2 |
2 | Historical Trade with Iran | 2 |
3 | Road to Sanctions | 3 |
4 | Iran under Sanctions | 5 |
5 | Global Outlook | 8 |
6 | The Road Ahead | 9 |
7 | References | 12 |
Introduction
Iran is the second largest country in the Middle-East, and one of the major regional powers alongside countries like Israel, Iraq, and Egypt ("House of Commons - Foreign Affairs - Eighth Report", 2007). Being one of the most influential powers throughout history, it also has a rich cultural history, that dates back to some of the earliest civilisations in the world. Persia, as it was known as, in the medieval times, was one of India’s major partners not only in language, literature, art, architecture, religion, culture, and music, but also in trade.
Historical Trade with Iran
The Mughals under Humayun became a highly Persianised dynasty as the Safavid rulers had given him shelter during his struggle to reclaim the throne of Delhi from Sher Shah Suri. As a consequence, trade between the two kingdoms began to sore; Persia had a great demand for Indian spices (like pepper), and Textiles (like silk, muslin, linen, and chintz), while the Indian kingdoms needed warhorses. During this period, both land and maritime trade flourished between India and Iran, and communities of Persian merchants began to settle permanently along Indian coasts in Malabar, Gujarat, and the Konkan regions ("Encyclopædia Iranica", 2012).
During the early to mid-1800s, as a result of European imperialism, and the wars it brought with it, Persian controlled territory started to decrease. Iran lost many resource rich regions in the Caucasian mountains like present day Georgia and Armenia. (Andreeva, 2010, pp. 69 - 133). India during the same period was being ruled by the British Empire, and therefore the trade relations between the two countries also changed dramatically from the old ways. Britain, had signed treaties of friendship with Iran, in order to insure themselves against the French and the Russians, and therefore kept garrisons in Tehran. The primary commodities of trade now became opium, from India to Iran, and tea, from Iran to India. ("Encyclopædia Iranica", 2012).
A brief timeline of Indo-Iran Relations []:
1947 | India is partitioned to create the sovereign states of India and Pakistan. India loses geographical boundaries with Iran |
1950's | The geographical distance manifests itself in a political form. While Iran signs up with the US backed Central Treaty Organization (CENTO), India founds the Non Align Movement (NAM) |
1979 | Iranian revolution paves way for renegotiation of India Iran relations |
1990's | Strong bilateral relations develop between the two nations in the post-cold war era. Both nations support the Northern Alliance against the Taliban in Afghanistan |
2005 | A BBC poll finds that 71% of Iranians view relations with India positively, the most favourable rating India got from any country in the world |
2006-2012 | Iran becomes India's second largest source of crude oil. Accounts for 15% of India's crude oil needs |
2009 | Under pressure from the United States, India votes against Iran in a resolution passed by the International Atomic Energy Agency (IAEA). The resolution was regarding Iran's nuclear expansion |
2012 | International sanctions against Iran's nuclear programs begins to affect India's payment mechanisms for Iranian Oil. Iran agrees to accept 45% of oil payments from India in rupees to circumvent sanctions imposed on Iranian banks |
Jan-15 | India halts oil import for the first time in a decade |
Jul-15 | Iran signs nuclear deal with P5+1. The signing of the deal meant that Iran could boost its oil production, thereby lowering global oil prices |
Oct-15 | Iran's ambassador to India states that India will get priority in Iranian projects given that India maintained commercial contacts with Iran even when sanctions were imposed |
Dec-15 | India hosts India-Iran joint commission meeting for the first time since lifting of sanctions on Iran. Both sides discuss strategic partnership |
Feb-16 | Iran invites India to invest $8 billion in infrastructure projects |
May-16 | Prime Minister Modi makes an official visit to Iran. Historic deal for the development of Chabahar port is signed. India developing the port means that a new gateway to Afghanistan, Middle East and Central Asian countries is opened up for better trade relations |
Road to Sanctions
Soon however, Britain’s primary interest in Iran became Petroleum. In 1901, an Englishman William Knox D’Arcy, who had previously held mining contracts in Australia, was successful in obtaining, from the Shah of Iran, Mozaffar ad-Din Shah, the right to explore for oil in Iran and subsequently established the Anglo-Persian Oil Company. As Iran nationalised its oil resources in 1953, under the Prime Ministership of Mohammed Mosaddegh, APOC after divesting its Iranian businesses rechristened itself as British Petroleum.
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