India and Iran are engaging in the 19th round of political consultations in New Delhi, with a focus on restoring energy trade and expanding non-oil commerce.
The discussions, led by Iran’s Deputy Foreign Minister Majid Takht Ravanchi, reflect a mutual commitment to overcoming challenges stemming from U.S. sanctions that halted oil trade in 2019.
Energy trade has historically been a cornerstone of India-Iran relations, with Iran consistently ranking among India’s top oil suppliers until 2019.
However, sanctions disrupted this partnership, causing trade to decline from $17 billion in 2018-19 to $2.3 billion in 2022-23. While acknowledging India’s constraints due to sanctions, Iranian officials emphasize the need to address these issues and explore avenues for cooperation.
A critical aspect of the talks is the Chabahar port, which remains exempt from U.S. sanctions. Operated by an Indian state-run firm, Chabahar offers a strategic opportunity to enhance connectivity with Central Asia and Russia.
Iran’s proposal for India to develop petrochemical industries in the Chabahar free trade zone could strengthen economic ties further.
Chabahar Port emerges as a pivotal hub for India-Iran connectivity and trade goals.
The 10-year agreement signed in May 2024, coupled with a $250 million credit line from India, underscores the significance of this port in future collaborations.
Non-oil trade, including agriculture and tourism, has shown promise, with Iran exporting $1.2 billion worth of non-oil commodities to India from March to November 2024. Diversifying trade beyond energy is a shared priority, enabling both nations to build resilient economic relations.
The backdrop of these discussions includes global shifts, such as China’s role in West Asia, where it brokered a rapprochement between Iran and Saudi Arabia in 2023. This highlights the importance of strategic partnerships in fostering regional stability.
India and Iran’s commitment to addressing shared challenges, such as terrorism, underscores the potential of their collaboration for regional and global peace. By focusing on trade expansion and connectivity, both nations aim to transform challenges into opportunities, fostering a future of mutual growth and cooperation.
